Report: Brits cancelling SVoDs to reduce spending
October 17, 2022
Findings from the latest Entertainment on Demand report from evidence-based insights and consulting company Kantar reveal that between July to September 2022, the number of VoD-enabled households that subscribed to at least one video streaming service in Great Britain fell to 16.18 million, down -234k, quarter on quarter, representing 56 per cent of households in the UK market.
Kantar’s data reveals that House of the Dragon on NOW was the most enjoyed SVoD title over the quarter, followed by Lord of the Rings: The Rings of Power on Prime Video. Furthermore, the findings indicate some degree of market stabilisation after consecutive declines in subscriptions in 2022.
Paramount+ buoys overall numbers whilst households continue to cut back
After a sharp fall in SVoD household penetration in Q2’22, some degree of stabilisation in the market in Q3 should be seen as a positive sign, with penetration losses lower than in the previous 2 quarters. Continuing the improving picture is the fact that overall SVoD subscriptions increased, in absolute terms in Q3’22, up by 108k compared to Q2’22.
“There are a number of dynamics at play in the market, such as the cost-of-living crisis and subsequent ‘cord-cutting’, as well as a degree of ‘content fatigue’, experienced by some VoD viewers, which has resulted in an overall drop in household SVoD penetration,” notes Dominic Sunnebo, Global Insight Director, Kantar, Worldpanel Division. “However, the launch of a new streaming service into the UK market has been relatively successful, suggesting that fresh content is still a key attraction for British viewers.”
“Netflix accounted for just under one in four SVoD churners in the latest quarter, but what’s key here is that 45 per cent of these Netflix churners dropped out of the SVoD market altogether. Data indicates that viewers did not switch to a competitor, or use a secondary streaming subscription; rather, they left the SVoD market altogether, reverting back to either pay-TV or linear TV. In fact, 38 per cent of Netflix customers only have a Netflix streaming subscription, and these ‘solo streamers’ are making up a disproportionate number of Netflix churners.”
With a major new streaming service, Paramount+, launching in the quarter, it might be expected that SVoD would see a bounce in penetration, but 95 per cent of Paramount+ subscribers were already subscribing to one or more subscription streaming services. So, whilst they contributed to the overall size of the SVoD market, the service brought in a negligible number of entirely new streaming households. Subsequently, subscription stacking slightly rose in the latest quarter, with the average VoD-enabled household subscribing to 2.5 different services, up from 2.4 the previous quarter.
For Paramount+ to leapfrog Discovery+ and Apple TV+, both who have been present in the GB market for well over 12 months, is an impressive feat. However, this rapid growth must be caveated with the fact that many of Paramount+ subscribers are accessing the service via a deal with Sky TV, as Sky Cinema customers are able to access the service at no extra cost. Halo proved a strong draw for new Paramount+ subscribers, with 25 per cent of their new content-driven subscribers citing the title as their key motivation for joining, whilst Star Trek: Strange New Worlds also performed impressively.
“Off the back of its rapid growth, Paramount+ now has to work fast to ensure the strength of bond with its newly acquired subscribers,” advises Sunnebo. “Current subscriber advocacy is relatively low, with just 7 per cent of Paramount+ subscribers having multiple SVoD services ranking it as their most important service. At this early stage of launch, this is not unusual, but the critical task for Paramount+ is enabling fast discovery of their wider content catalogue beyond heavily marketed titles like Halo and Star Trek.”
Disney+ stays #1 for subscriber advocacy, but Netflix reverses negative trend
Last quarter, Disney+ unseated Netflix in a key measure of subscriber advocacy – net promoter score – and has held onto its pole position in Q3’22, though the gap with Netflix has reduced somewhat as it bounced back from an all-time low Q2’22. The steady increase in subscriber advocacy for Disney+ is resulting in positive movement across an array of other key metrics, with monthly churn in the quarter falling to an average of just 1.7 per cent, whilst the same time continuing to secure strong share of new subscriber acquisition. That made Disney+ the fastest growing service major service in the Q3’23 quarter (excluding newly-launched services).
The rings vs. the dragons
Q3’22 saw the release of two hugely-anticipated and expensive series, Lord of the Rings: The Rings of Power on Prime Video, and the Game of Thrones prequel, House of the Dragon, available on NOW. The two titles accounted for #1 and #2 in the list of most-enjoyed SVoD content over the quarter – House of Dragon at #1 with 7 per cent and Lord of the Rings: The Rings of Power at #2 with 4 per cent. Stranger Things on Netflix rounded out the top 3 list. House of the Dragon was a key source of acquisition for NOW in the quarter, accounting for 34 per cent of new content-driven subscribers, whilst the equivalent figure for Prime Video with The Rings of Power was 11 per cent. Some 82 per cent of those citing The Rings of Power as their top title over the quarter were male, compared to 66 per cent of House of the Dragon viewers, highlighting a key difference in terms of mainstream appeal.
After the success Disney+ enjoyed with Obi-Wan Kenobi in Q2’22, one of its top-performing titles in the latest quarter was Only Murders in the Building (#8), highlighting the broader appeal Disney+ is now generating with its Star branded content.