The UK streaming boom has officially ended after the number of homes with services such as Netflix, Amazon and Disney + fell in the first quarter as the cost of living crisis forced hundreds of thousands of streaming fans to reduce their subscriptions to just a few favorites.
The number of homes in the UK that have at least one paid subscription streaming service fell by 215,000 in the first quarter – ending a decade of near-continuous growth in streaming services – as households cut budgets to cope. as inflation reaches three -high decades.
“As many streaming services have witnessed significant revenue growth during the height of Covid, this moment will be sobering,” said Dominic Sanebo, global director of insight at Kantar Worldpanel, publisher of the Entertainment on Demand report. “Evidence from these findings shows that British households are now actively looking for ways to save, and the video-on-demand (SVoD) market is already seeing the effects.
The unprecedented number of streaming services now on the market, at a time when living standards are expected to decline the most since the 1950s, means that growing home entertainment budgets, which have been sacred to pandemic blocking conditions are now being reduced.
The Kantar Worldpanel report found that 16.9 million households in the UK had at least one subscription service – although the average was 2.4 – at the end of the first quarter. Although there were 1.29 million new subscriptions to SVoD services in the UK in the first three months, this was exceeded by 1.51 million cancellations, more than half a million of which are attributed to “saving money”.
The reduction in streaming budgets looks set to increase, with the share of consumers planning to repeal at least one SVoD citing “wanting to save money” reaching a record 38%.
“In times of financial uncertainty, services must be indispensable in the minds of subscribers,” Sanebo said. “As a result, it is now more important than ever for SVoD providers to demonstrate to consumers how their services are indispensable at home in what has become a highly competitive market.”
The report found that cost-conscious streamers identified Amazon’s Netflix and Prime Video as “mandatory” services, with the two most popular platforms in the world having the lowest customer dropouts in the first quarter.
The action series Prime Video, the dramas Reacher and Netflix Ozark and Inventing Anna proved to be the most popular shows on SVoD services in the UK in the first quarter.
In contrast, Disney +, the world’s third-largest service, reported its withdrawal rate (the rate at which customers cancel subscriptions) tripled to 12% quarterly. Sky’s Now TV, Discovery + and BritBox, the joint venture between ITV and the BBC, also had “significant jumps” in quarterly withdrawal rates.
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“It can be seen that Netflix and Amazon are the last when households are forced to give priority to spending,” said Sanebo. “Among the homes that subscribe to streaming services, Netflix consistently ranks number one in importance, regardless of which platform it faces. But for people like Disney +, the consequences are significant, as it has to focus on replacing existing services that households subscribe to, and will no longer be seen as another add-on.
However, even the world’s largest streaming service, which will report first-quarter results on Tuesday and give an idea of market strength in the coming months, is feeling the pressure of the slowdown since the pandemic.
In January, Netflix predicted that it would add only 2.5 million new subscribers worldwide in the first quarter, its worst start in a year in more than a decade, and confirmed that it would add the fewest subscribers in 2021. since 2015. Last year, Netflix attracted the smallest number of new subscribers in the UK since its launch in 2012.
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