Advanced Television

Study: Cost concerns drive SVoD churn

April 20, 2022

Findings from the second annual State of Streaming report from fan platform Fandom suggest that cost is the leading reason why US subscribers will likely cancel a subscription.

The study examines the impact of changes in consumer viewing behaviours and mindsets on the streaming industry, uncovering key findings such as why consumers cancel their subscriptions, what it takes to retain them, and how streaming services can drive platform loyalty and differentiate themselves to avoid churn.

As an overwhelming amount of streaming offerings continue to hit the market, fans have countless ways to consume the entertainment they love. So, what really moves the needle for consumers? This year’s study focuses on three ‘Rules of Retention’:

  1. Streaming services must lean into genre strengths and value-adds to retain customers
  2. Studios must rethink the in-theatre experience to differentiate from growing at-home viewing trends
  3. Both streaming services and theatres must super-serve consumers beyond the screen to drive loyalty and favourability

Major takeaways include:

  • Cost is the leading reason why subscribers will likely cancel a subscription – 61 per cent believe their streaming services are too expensive and value the average video streaming service at $7.46 [€6.91] monthly.
    • Average prices consumers want to pay for top streaming services include: Netflix ($10.60), HBO Max ($9.30), Disney+ ($9.20), Hulu ($8.60), APV($8.60), Apple TV+ ($6.9) Paramount+ ($6.80) Peacock ($5.50)
  • 73 per cent of fans would justify the cost of a streaming service if it provides exclusive access to entertainment offerings like exclusives and behind-the-scenes content as well as merchandise & collectibles
  • 32 per cent of fans would find added value in bundles with gaming subscriptions
  • 62 per cent state that GENRE is the key differentiator with Disney+ being acknowledged as the genre-leader to date
  • 19 per cent of consumers don’t have a strong allegiance to streaming service as viewer behaviour is driven by content, not provider loyalty
  • 45 per cent claim that streaming services who establish partnerships – such as offering packages with food delivery services – would enhance their viewing experience and drive loyalty
  • 46 per cent look for community and culture around their entertainment interests
  • Franchises that foster always-on fan exploration outside of releases live at the top of Fandom’s rankings – #1 Star Wars, #2 Disney, #3 Harry Potter, #4 Marvel
  • Disney’s massive franchises with critical fandoms will make them a standout leader in the streaming space – and consumers believe Disney+ has a +30 per cent higher value than an average video streaming service
  • 80 per cent of Fandom users have returned to theatres or are comfortable with in-theatre viewing – but 74 per cent of consumers are willing to wait to see the movie as part of one of their subscription plans, as long as it’s free
  • When consumers prefer to see movies in a theatre it is because of:
    • 61 per cent – Screen size
    • 54 per cent – Sound Quality
    • 51 per cent – Event/Outing
  • When consumers prefer to watch movies at home it is because of:
    • 82 per cent – Ability to pause while watching
    • 65 per cent – Owning movies they can rewatch
    • 61 per cent – Watch with subtitles

“A crowded and competitive market has driven the major streaming platforms to shift their focus from acquisition to retention,” said Perkins Miller, CEO of Fandom. “Fandom is uniquely positioned to partner with streamers to help them understand key retention drivers and how to continuously re-engage their audiences.”

“Our proprietary data – Fan DNA – unlocks powerful insights into the fan mindset, enabling us to understand not only what fans are watching now, but what they want to watch next,” said Stephanie Fried, CMO of Fandom. “A deep and granular understanding of fan preferences and motivations allows us to share insights to inform our partners’ programming, messaging and targeting strategies, resulting in a more satisfied and loyal customer base.”

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