Streaming subscriptions down as UK households cut budgets | netflix

The UK streaming boom is officially over after the number of households with services such as Netflix, Amazon and Disney+ fell in the first quarter as the cost of living crisis forced hundreds of thousands of fans streaming companies to reduce their subscriptions to a few favorites. .

The number of UK households with at least one paid subscription streaming service fell by 215,000 in the first quarter – ending a decade of almost uninterrupted growth in the popularity of streaming services – as households slashed their budgets to cope with inflation at a three-decade high.

“With many streaming services experiencing significant revenue growth during the height of Covid, this moment will be sobering,” said Dominic Sunnebo, global chief information officer at Kantar Worldpanel, publisher of the Entertainment on Demand report. “Evidence from these results suggests that UK households are now proactively looking for ways to save, and the subscription video on demand (SVoD) market is already seeing the effects.”

The unprecedented number of streaming services that are now on the market, at a time when living standards are set to suffer their biggest decline since the 1950s, means that booming home entertainment budgets that were sacrosanct during pandemic lockdown conditions are now reduced.

The Kantar Worldpanel report found that 16.9 million UK households had at least one subscription service – although the average was 2.4 – at the end of the first quarter. While there were 1.29 million new subscriptions to SVoD services in the UK in the first three months, this was offset by 1.51 million cancellations, of which over half a million attributed to “save money”.

Shrinking streaming budgets are set to increase, with the proportion of consumers planning to cancel at least one SVoD citing ‘wanting to save money’ as their reason reaching an all-time high of 38%.

“In times of financial uncertainty, services must be indispensable in the minds of subscribers,” Sunnebo said. “As a result, it is now more essential than ever that SVoD providers demonstrate to consumers how much their services are essential at home in what has become a fiercely competitive market.”

The report found that cost-conscious streamers identified Netflix and Amazon’s Prime Video as the “must-have” services, with the world’s two most popular platforms proving to have the lowest rate of customer departures in the first quarter.

Prime Video’s action series Reacher and Netflix dramas Ozark and Inventing Anna proved to be the most popular shows on UK SVoD services in the first quarter.

In contrast, Disney+, the world’s third-largest service, saw churn (the rate at which customers cancel subscriptions) triple quarter over quarter to 12%. Sky’s Now TV, Discovery+ and BritBox, the joint venture between ITV and the BBC, also saw “significant jumps” in churn rates during the quarter.

“Netflix and Amazon can be considered last to go when households are forced to prioritize spending,” Sunnebo said. “Among households that subscribe to streaming services, Netflix is ​​consistently ranked number one in importance, regardless of the platform it faces. But for the likes of Disney+, the implications are significant because it must shifting its focus to replacing existing services that households now subscribe to, it will no longer always be seen as just another extra add-on.

Still, even the world’s largest streaming service, which will release its first-quarter results on Tuesday and provide insight into market strength in the months ahead, is feeling the pressure of the post-pandemic slowdown.

In January, Netflix predicted it would add just 2.5 million new subscribers worldwide in the first quarter, its worst start to the year in more than a decade and confirming that in 2021 it added the fewest. subscribers since 2015. Last year, Netflix attracted the lowest number of new subscribers in the UK since its launch in 2012.

Source link

Edward L. Robinett