British consumers are continuing to cancel streaming subscriptions as the churn rate reaches record numbers amid the cost of living crisis.
Approximately 1.5 million VOD accounts have been shut down so far in 2022, according to Kantar, signalling an end to the pandemic-fuelled streaming boom.
The research found that 58 percent of consumers retain at least one streaming service but multiple platform households are down, citing budgetary concerns as the primary reason for cancellation. Secondary reasons included not using the services often enough and a lack of new shows users wanted to watch.
“Forced to prioritise”
Kantar revealed that 3 percent of British households took out a subscription during Q1 2022, down 1.2 percent year on year, while cancellations are up 25 percent over the same period.
The survey of 14,500 people showed that Britbox, Apple TV Plus and Discovery Plus had the highest churn rates. Disney Plus represented the biggest increase in terminations, its quarterly churn tripling from the previous quarter to reach 12 percent.
The lowest churn rates belonged to Netflix and Amazon Prime Video, “the last to go when households are forced to prioritise,” according to Kantar. This coincides with a 43 percent drop in Netflix shares and rising subscription costs for the company, having recently upped its fees for the second time in 18 months.
“Value and breadth”
As the cost of living climbs and the British marketplace continues to expand with the addition of Peacock and Viaplay, it is incumbent on streaming providers to offer “value and breadth” to the public or risk cancellation, says Phil Smith, Senior Researcher at Opinium. “We’re seeing consumers increasingly concerned about the rise in their cost of living,” he notes. “It”s therefore no surprise to see them look to cut their outgoings and multiple streaming subscriptions is a clear place to start.”
Dominic Sunnebo, global insight director at Kantar, concurred that streaming providers have to prove their worth to consumers “in what has become a heavily competitive market.”
Sunnebo calls the report “sobering” for the sector, and it is far from the only evidence that streaming peaked at the height of the pandemic. A similar study last week by Lloyds Bank found that 1.2 million subscription payments had been halted in the last year, 47.1 percent of which were entertainment streaming services.
The same trend is apparent in the US, with Deloitte forecasting that more than 150 million people will cancel a paid streaming subscription in 2022.