British households have canceled video subscriptions in record numbers as they cut insignificant costs to cope with the cost of living, raising fears that the pandemic-led streaming boom is over.
Users withdrew from about 1.5 million on-demand video accounts such as Disney Plus, Apple TV Plus and Now in the first three months of the year, according to the Kantar think tank.
While 58% of households retain at least one streaming service, down from just 1.3% by the end of 2021, the shutdowns show that viewers have become more demanding of subscribing to multiple platforms.
The desire to save money was the main reason for the cancellation, and young adults became especially wary of paying for television in addition to the annual license fee of £ 159, the researchers found.
The findings are “sobering” for streaming providers, said Dominique Sanebo, global director of insights at Kantar. He said streaming services must prove their value to consumers “in what has become a highly competitive market”.
Households are looking for ways to cut budgets to cope with growing bills. Rising energy, clothing and food prices pushed inflation to a 30-year high in March, according to the National Statistics Office last week.
Media investors are becoming increasingly concerned that the rapid growth of video streaming worldwide – driven by the demand for home entertainment during the pandemic – has reached its peak.
Shares of Netflix, which are due to announce earnings for the first quarter on Tuesday, have fallen 43% so far this year, as the number of subscribers worldwide is disappointing.
Consumers are re-evaluating their subscriptions in response to higher fees. Several suppliers have raised prices in markets, including the United Kingdom, in part to offset rising labor and equipment costs that have made television and film production more expensive.
Among them is Netflix, which recently implemented its second round of price increases in the UK in 18 months, raising standard monthly subscriptions from £ 10 to £ 11.
At the same time, opportunities for British viewers continue to expand. Recent proposals include Peacock from Sky, which includes content from NBCUniversal. Viaplay, the Scandinavian streamer, plans to launch in the UK this year.
Many users still sign up for streaming services. The Kantar survey, based on interviews with 14,500 people, found that about 3% of British households subscribed in the first quarter.
However, this was a significant slowdown of 4.2%, who did so in the same period a year ago.
Meanwhile, repeals accelerated from 1.2 million a year ago and from 1.04 million in the last three months of 2021.
After the budget problems, the most frequently cited reasons given by those who have canceled their subscriptions are that they do not use them often enough and that the platforms lack new programs they want to watch.
The net effect is to reduce the number of households with at least one paid subscription by 215,000 compared to the previous quarter to 16.9 million.
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Britbox, Apple TV Plus and Discovery Plus had the highest ebb rates – meaning they lost the most users on a gross basis.
Disney Plus has the largest increase in the ebb rate, Kantar said. Its quarterly outflow tripled compared to the previous quarter to 12%.
Amazon’s Netflix and Prime Video have the lowest withdrawal rates in the quarter. Kantar said it was a sign that they were “the last ones to go when households are forced to give priority”.
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