Research: Consumers cutting streaming services to save money
August 24, 2023
Parks Associates, the technology research firm, has released the consumer study Video Services: Shifting Demand, presenting a focused analysis of the video services landscape, including insight into why consumers are switching and canceling streaming services. The research shows the average annualised subscriber churn rate for streaming video services in the US stands at 47 per cent.
The top driver of service cancellations is the desire to save money – 29 per cent of US internet households say they cancel a service to save money. Finishing a show is the next most popular reason.
Consumer focus on price and content underscores the pivotal role of value in consumer decision-making,” said Sarah Lee, Research Analyst, Parks Associates. “When high-quality content is absent, subscriber churn becomes inevitable, making content diversity a cornerstone of profitable growth, along with consideration of pricing.”
Rapid changes in viewer behaviours, coupled with the ongoing Writers Guild of America (WGA) strike, emphasise the content conundrum in today’s video services market. A steady flow of scripted content is pivotal to viewer engagement, but it is costly and prone to disruption. Providers need to align content strategies with evolving viewer demands and greater emphasis on financial returns, which accounts for the recent rise of Free Ad-Supported TV (FAST) and AVoD services. Disney recently announced increases for premium Disney+ and Hulu subscription services, while offering ad-supported service bundles at highly discounted levels.