British households cancel streaming subscriptions in record numbers

British households cancel streaming subscriptions in record numbers

British households cancel streaming subscriptions in record numbers

British households have canceled video subscriptions in record numbers as they curb non-essential spending to cope with the cost of living squeeze, reinforcing concerns that the pandemic-fueled streaming boom is over.

According to data from analytics group Kantar, consumers abandoned about 1.5 million video-on-demand accounts like Disney Plus, Apple TV Plus, and Now during the first three months of the year.

While 58% of households maintain at least one streaming service, a decline of only 1.3% since the end of 2021, the disruptions suggest viewers have become more perceptive about the multi-platform subscription.

The desire to save money was the most important reason for cancellations, and young adults became particularly wary of paying for television in addition to the £ 159 annual fee, the researchers found.

The results were “sobering” for streaming providers, said Dominic Sunnebo, Kantar’s Global Insight Director. He said streaming services needed to prove their worth to consumers “in what has become a highly competitive market.”

Families are looking for ways to cut budgets to cope with rising utility bills. Rising energy, clothing and food prices pushed inflation to a 30-year high in March, according to data from the Office for National Statistics last week.

Media investors have become increasingly concerned that the rapid global growth of video streaming, encouraged by the demand for home entertainment during the pandemic, has peaked.

Shares of Netflix, which is expected to release first quarter earnings on Tuesday, are down 43% this year amid disappointment in the number of global subscribers.

Consumers are re-evaluating subscriptions in response to higher rates. Several suppliers have raised prices in markets, including the UK, in part to offset rising labor and facility costs that have made television and film production more expensive.

Among them is Netflix, which recently rolled out its second round of UK price hikes within 18 months, increasing standard monthly subscriptions from £ 10 to £ 11.

At the same time, the options for British viewers have continued to expand. Recently introduced offerings include Sky’s Peacock, which features content from NBCUniversal. Viaplay, the Scandinavian streamer, plans to launch in the UK this year.

Many consumers are still signing up for streaming services. Kantar’s research, based on interviews with 14,500 people, found that around 3% of British households signed up for a subscription during the first quarter.

However, this was a marked slowdown from 4.2 percent in the same period a year ago.

Cancellations, meanwhile, have increased from 1.2 million a year ago and from 1.04 million in the last three months of 2021.

After budget concerns, the reasons most frequently cited by those who discontinued their subscriptions were that they weren’t using them often enough and that platforms were lacking new shows they wanted to watch.

The net effect is that the number of households with at least one paid subscription decreased by 215,000 from the previous quarter, to 16.9 million.

Britbox, Apple TV Plus, and Discovery Plus had the highest churn rate, meaning they lost the most users on a gross basis.

Disney Plus had the biggest increase in its dropout rate, Kantar said. The quarterly dropout rate tripled compared to the previous quarter to 12%.

Netflix and Amazon’s Prime Video had the lowest churn rates in the quarter. Kantar said this was a sign that they were “the last to leave when families are forced to prioritize”.

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