Spring Cleaning Comes For Streaming

By Max Newfield | September 25, 2024

Spring is an opportunity for taking stock, for the smelling of roses, and the cleaning out of our winter hibernation dens. Thus, sometime between the devouring of Easter candy and the filing of taxes, every household must assess which streaming subscriptions they hold most dear.

When you engage in your yearly Spring Cleaning ritual – digital or otherwise – you might take a look at the recurring charges you spend every month. Checking your bank statements, you notice that while your favorite services are there, you’re still paying for a streaming app that you haven’t used in months. As the monthly fees rack up, you can’t even remember the last time you logged in.

This is not uncommon. 

In fact, it’s the norm for many home viewers of shows and movies. Just last week, I realized that I was still paying for Disney+, which I had signed up for solely to watch the Star Wars spinoff series Andor all the way back  in 2022.

With so many new options for streaming, you can likely relate. Turns out, my experience is actually one of the biggest trends in the streaming industry.

According to the new, annual “State of the Subscriptions” report from Antenna Research, users in the United States canceled a whopping 140.5 million streaming service subscriptions in 2023. It’s the largest drop in half a decade, with 36 million more customers canceling last year than in 2022.

But what do these numbers mean for an industry as large as streaming television? How do these numbers stack up to streaming service growth? Do those lapsed subscribers return or do they seek a new streaming model entirely?

All these questions and more are answered below.

How Subscriber Churn Changed Streaming in 2023

Streaming appears to be entering a crossroads.

According to a study by Deloitte conducted in October 2023, U.S.-based households are spending an average of $61 per month on SVOD services. These rising monthly charges coupled with the costs for cable TV, streaming with live TV, and internet services may soon mean that it might be too much for the average user.

The study says that consumers aren’t happy: 36% across generations surveyed say that the content available on streaming services isn’t worth the price while 48% say they would cancel their favorite paid SVOD service if monthly prices went up just $5. Of those surveyed, 40% said they had canceled a service in the past six months.

The Antenna study shows that 39% of SVOD subscriptions were in their first year. Without streaming leader Netflix, which has the lowest churn rate of 2%, that number jumps to 45%. According to Antenna’s data, cancellations are likeliest when within the first three months of a subscription. That risky cohort accounts for one in five total subscriptions.

It’s Not All Bad News For Premium SVOD

Even with all of the subscriber churn, streaming is still growing. According to Antenna, there were 164.7 million Gross Additions in 2023, an increase of 19.3 million compared to 2022. When you subtract the 140.5 million cancellations, that’s a net addition of 24.2 million. Compared to 2022’s 41.4 million net additions, streaming growth has been almost halved.

With plateauing growth, streaming may enter a more mature era more concerned with retaining loyal customers than expanding its market cap. It might not be worth hitting the panic button yet. Just as subscriber churn is up, so are re-subscriptions. According to Antenna, 41% of cancellations are “won back” within 12 months.

Antenna also narrowed down a growing segment of the market: Serial Churners. These are users who have canceled three or more SVOD services in the past two years. They make up nearly one in four streaming consumers, which is an increase of 42% from 2022. These users made up nearly 60% of all cancellations in 2023.

The volatility in this market should have business owners wondering what content can brings former subscribers back into the fold. According to Antenna, AppleTV+ had the highest resubscribe rate. Netflix, Prime Video, and more have experimented with cheaper ad-supported tiers to keep budget-conscious users happy.

AVOD and FAST Channels Offer Great Content Without the Monthly Charges

As more and more users are feeling the financial strain of monthly subscriptions to SVOD, they’re flocking to free, ad-supported alternatives like Advertising Video On Demand (AVOD) and FAST Channels. The rise of Pluto and Tubi have shown how AVOD can keep a loyal customer base without worrying about subscription numbers every quarter. On the FAST channel side, it’s estimated that one in three Americans regularly watch a FAST provider and that FAST will eclipse subscription-based streaming service’s dominance by 2030.

What does this mean for you?

The first lesson any content business can take from the rise of subscriber churn? Find out what your audience likes and give it to them. In a turbulent streaming world with serial churners, re-subscribers, and cancelations, loyal customers are the best way to a sustainable streaming business.

If you have great content, users will come. Tailoring to your audiences’ needs, viewing habits, and tastes will keep them around for the long term.

We can help with that.  We’re experts on FAST channels. Matchpoint helped give a platform to The Joy of Painting 40 years after it debuted on American Public Television. Find out more in our Bob Ross Inc. customer story.

Finally, with all that reach your content is going to have – and with all the other channels you will be competing with – your brand is more important than ever before. Present a coherent, attention-worthy story across all platforms and channels so that your audience can find you in a crowded field of content and stay loyal. Matchpoint can help you with that too…

Let’s Talk

If you are a content business owner looking to find your audience in a dynamic marketplace, let Matchpoint help. We can help you launch and grow your streaming business in weeks, not months.

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