As the cost of the living problem leads increasingly budget-conscious consumers to cancel streaming services like Netflix, Amazon Prime Video, and Disney+, nearly one million British families have given up on the streaming revolution so far this year.
Rings of Power and House of the Dragon, two of the most-hyped and expensive shows of all time, each cost $650 million (£580 million) to produce, but their debut did not provide a strong enough draw to stop a further decrease of 234,000 homes with at least one premium streaming service in the third quarter.
Between January and September, 937,000 fewer houses in the UK had at least one paid subscription than in the previous three months, as budget-conscious families prioritized necessities like food, electricity, and housing costs over home entertainment.
According to Dominic Sunnebo, global insight director at Kantar Worldpanel, “one million homes have quit streaming.”
People are canceling in order to save money, which is why this trend has emerged. Although the most recent quarter had two of the year’s most highly anticipated releases, both of which scored among the quarter’s top two most loved pieces of subscription video-on-demand content, we still observed the negative trend of the market shrinking.
According to Kantar Worldpanel, little over 16 million British households currently pay for a subscription video-on-demand service. According to Ofcom, the media industry watchdog, more than 5 million homes have access to the three most popular services, Netflix, Prime Video, and Disney+, which together cost roughly £300 yearly.
The research emphasizes the difficulty Netflix is having in reviving growth as it prepares to introduce a low-price ad-supported tier in a dozen countries in November.
After reporting its first subscriber decline in a decade earlier this year, the world’s largest streamer has cut staff and become more disciplined with its $17bn annual content budget. As a result, the company is expected to add only 1 million new signups globally when it reports third-quarter figures on Tuesday.
Nearly a quarter of British households switched to Netflix or abandoned their streaming provider in the third quarter, with nearly half of these people abandoning the paid-for streaming market entirely.
In spite of a declining user base, the average UK home now has 2.5 streaming subscriptions, and many users are happy to add even more.
As a result of the release of Paramount+, which has shows including “Star Trek: Strange New Worlds,” “Yellowstone,” and “Halo,” the total number of premium streaming subscribers in the United Kingdom rose by 108,000 in the third quarter, reaching 28.2 million.
Paramount+ is included for free in every Sky TV customer’s movie package, which likely inflated the growth numbers.
According to Kantar’s data, Prime Video, Paramount+, and Disney+ attracted 29.4%, 24.6%, and 17.5% of new streaming on-demand subscribers, respectively, in the third quarter, while Netflix remained stagnant.
Only ITV and the BBC’s BritBox service fared worse than the corporation over the three-month period, capturing a combined 0.9% and 0.8% of new subscribers, respectively.
When Netflix’s new Basic with Ads plans debuts in the United Kingdom on November 3, the streaming service is anticipating an influx of subscribers who are looking to save money.
Customers have remained loyal to Netflix “quite well” despite the competitive market, but churn rates are increasing, as noted by Sunnebo.
But Netflix’s main issue is that it’s hard to get new people to sign up. For Netflix to succeed, it must attract new subscribers in addition to retaining the ones it already has.
With the number of cancellations in the third quarter significantly lower than the peak of 488,000 recorded in the second quarter, the survey found overall signs of stabilization in the UK market in the lead-up to Christmas.
Even though the number of people who intend to terminate their subscriptions to streaming on-demand services due to “wanting to save money” hit a record high of 38% in the first quarter, analysts predict the number will drop to 35% in the Christmas quarter. This is, however, significantly higher than the 24% found by Kantar a year ago.
Sunnebo noted that it appeared that consumers had reduced the services they needed to reduce and were able to handle the situation.
But recent developments and their effects on people’s budgets suggest there may be further downward pressure in the fourth quarter.