Why more people are cutting back on streaming subscriptions
More people are jumping the streaming service ship.
November numbers from subscription analytics provider Antenna show that about a quarter of streaming service subscribers canceled at least three of their subscriptions over the past two years.
So what’s behind this migration away from services like Apple TV+, Hulu, Max and Netflix? And where are they going?
Sarah Krouse, Los Angeles bureau chief at The Wall Street Journal, joined WTOP’s Shawn Anderson and Anne Kramer to explain what’s behind the exodus.
Sarah Krouse: We’ve reached a point where streaming consumers are looking at their bills growing and growing as streamers try to increase prices to improve their own profitability. And households are saying, “Wait a second, we’re paying a lot of money almost close to what we had in the old cable days for these streaming services. Which ones can we afford to live without? Which ones do we only want to pay for when there’s a hit show that we like?”
So really what’s happening is consumers are getting a lot savvier at turning these services on and off as their hit shows come and go.
Shawn Anderson: Now, of course, so much has been made about cutting the cord here over the past few years. Are these folks going back to cable TV?
Sarah Krouse: Not necessarily and certainly not in droves.
Cable continues to be in structural decline, and the appeal of streaming, relative to cable, the ease of canceling — canceling your cable bill was a pain in the neck: You had to make a phone call. Streaming you can turn on and off.
The price of streaming is still, on a net basis, much lower. So you don’t see a reversion to cable in droves.
But what you do see is household saying, “There was a time in the streaming boom, when the prices of each of these services were so low that it felt like a deal, and like no big deal to have a lot of different services.”
But now the prices of all of them, and the sheer number of services available, has gone up such that it’s time to be more thoughtful about what you actually shell out for.
Anne Kramer: It seems so complicated as a consumer of all this, because you want to cut the cord, as Shawn just mentioned. But you can’t because you need the internet to get the streaming services and then you want to not have to pay so much for the streaming services. So how do we go about this and looking at whether or not we really need this?
Sarah Krouse: There’s a few different mechanisms that streamers are now offering to make it either simpler or to pare down the number of choices, or to appeal to customers with lower prices. One is ad-supported tiers of services.
So some consumers are saying, “OK, I can pay less for an ad-supported tier of service if I’m willing to watch advertisements, and that will let me keep the service, but pay less for it.”
Other streamers are partnering with their rivals on bundles, often for their respective advertising tiers. And that gives you, as a consumer, the value of two services at a reduced price less than you would pay for each of them individually.
So, there’s a couple of different options if you’re not totally ready to give it up, but you’re willing to tolerate some ads, or if you’re wanting to take a bundle you could get to for a lower cost.
There’s different sort of avenues that streamers are exploring to try to win customers back more quickly, because, I will say, there is data that shows a lot of streaming customers that cancel a service do later on return to it.
There was a stat in my story that 39% of subscribers who canceled a major streamer in the last quarter of 2022 were back within 11 months, so they do go back. But streamers are trying to figure out: “How do we get those people faster?”