UK streaming subscriptions fall amid household budget crunch

New research has revealed that the number of UK homes paying for streaming services fell in Q1 2022, with 1.5 million total cancellations in that period.

16.9 million UK households (58%) had at least one subscription service at the end of Q1 2022, which was down 215,000 quarter on quarter, according to research from Kantar. 1.29 million new subscriptions to streaming servicers were clocked, however there were also 1.51 million cancellations.

38% of consumers planning to cancel services and stated the primary reason for cancelling was ‘wanting to save money’. Households  that have signed up to streaming services subscribe to an average of 2.4 of them, however churn rates apparently increased almost across the board.

“With many streaming services having witnessed significant revenue growth during the height of Covid, this moment will be sobering,” said Dominic Sunnebo, Global Insight Director, Kantar, Worldpanel Division. “The evidence from these findings suggests that British households are now proactively looking for ways to save, and the SVoD market is already seeing the effects of this. As a result, it’s now more critical than ever that SVoD providers demonstrate to consumers how their services are indispensable in the home in what has become a heavily competitive market. New marketing and content acquisition strategies will likely need to be deployed to support this and avoid further churn.”

Adam Seagrave of trading investment platform Saxo Markets said: “The nightmare for Netflix may continue this week as the streaming service announces its Q1 earnings following a 39% drop off in its share price compared to this time last year. Following a boom through lockdown, the company missed its subscriber target in its last report in January and with users counting their pennies more than ever, their user growth may see another hit.

“Streaming services are quickly falling down the pecking order and a negative earnings from Netflix today could be an indicator that these entertainment stalwarts, such as Amazon Prime and Disney+, may struggle to prove their worth in the future.”

Netflix reinvented itself from a postal DVD subscription service into a streaming platform and subsequently did a lot of the legwork towards transforming how the world consumes TV and films. In the wake of its success, numerous other companies from all sorts of sectors tried to get in on the action – weather it was from tech (Apple, Amazon) TV studios themselves (Paramount) or entertainment conglomerates (Disney).

Exacerbated by the pandemic, the number of hours people globally have been prepared to give over to streaming their favourite TV shows or the latest films seems to have had no bounds, prompting anyone that could to capitalise on existing IP or just become film studios themselves to produce content in order to get subscribers onto their platform.

This is all fine and good, but the question was always was how many of these platforms would an average household actually shell out for on a monthly basis. Netflix is almost the default and the brand name is synonymous with streaming in general at this point, but there’s also Now TV, Dinsey+, Apple TV+, Hayu, DAZN, Britbox, Starzplay and more trying to get a sub out of you.

According to this research by Kantar, it appears that in the UK at least the gold rush of streaming we have seen up until now may be colliding with the current nationwide mood to watch the pennies as the very real world problems of rising living expenses, petrol prices and inflation. In that context, that third streaming app you never watch may feel like an easy thing to dispense with, especially since we are no longer confined to our homes with nothing else to do, as was the case for large stretches of the last two years.

 

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