Breaking
June 20, 2024

Customers Are Dropping Expensive Streaming Subscriptions

AiBot
Written by AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

Jan 5, 2024

Streaming services like Netflix, Hulu, and Amazon Prime saw an acceleration in customer cancellations to close out 2023. As prices for these popular services continue rising while the content libraries shrink, more Americans are re-evaluating their streaming budgets and becoming “serial cancelers.”

Streaming Prices Are Going Up While variety Goes Down

According to an article from the Wall Street Journal, the average churn rate – the percentage of subscribers who cancel in a given month – rose to over 6% by end of November 2022. This represents a 2.4 percentage point increase from 2019 levels.

Some key stats on rising costs and shrinking libraries:

Service Price in 2022 Price in 2024 % Increase
Netflix $15.50 $20.00 29%
Hulu $7-$13 $8-$15 14-15%
Amazon Prime Video $9-$15 $10-$16 11-7%

The content selection is also narrowing in some cases. Netflix had around 9,000 titles 5 years ago compared to just over 7,100 now. The loss of rights to huge catalogues like Friends, The Office, and other popular reruns has diminished the variety that initially attracted subscribers.

Customers Cutting The Cord Altogether

Many current and former streaming subscribers are going back to cable or satellite, according to an article from Fox 40. The supposed cost savings of ditching traditional TV for internet streaming is proving illusionary for some.

“It was costing me almost $120 a month to have what I had through streaming services,” said former streamer Luke S. “I calculated it would be cheaper to go back to cable and internet.”

Research groups like Antenna found that cancelling streaming services entirely and reverting to ad-supported free TV can reduce average monthly costs below $20. This signals that the great cord-cutting revolution might slowly be unwinding.

Will Streaming Players Adapt Offerings to Stem Cancellations?

Industry experts suspect that if cancellations continue rising, streaming services will have to change their offerings to retain subscribers.

As this Forbes article notes, more tiers with lower pricing could appeal to cost-conscious streamers:

“Streaming platforms might need to break up their libraries and allow people different pricing tiers based on what content they actually want to watch regularly.”

An analyst with Black Enterprise further predicts that incorporating more ad-supported plans will likely happen across the streaming sphere:

“I think we’ll start to see even more streaming services offering ad-supported tiers. This not only gives price-sensitive viewers a lower cost option, but provides streams an additional revenue source.”

Service Current Ad-Supported Plan? Expected Launch of Ad Tier
Netflix No Mid-2024
Hulu Yes N/A
Amazon Prime Video No Late 2024

So while fed-up streamers are cutting back on services to save money in the short term, the long term outlook suggests streaming providers will adapt with new offerings to stay competitive. It remains to be seen whether these changes can resurrect the cord-cutting era.

What’s Next For Streaming?

Despite the recent surge in cancellations, streaming still retains over 75% of the market share for TV content consumption. But holding onto these users and revenues will require strategic shifts.

Nearly all experts observe that the days of infinite growth are likely over. Streaming player stocks and subscriptions boomed wildly since 2015, but reaching maturity means the platforms have to focus more narrowly.

  • Providing greater transparency around what content will come and go month to month
  • Allowing shorter-term subscription periods like 1 week or 1 month rather than forcing year-long commitments
  • Investing billions into top-tier original content to replace 3rd-party reruns

These kinds of bold moves could help turn the tide. But for now, cancellations look poised to continue rising in 2023. Consumers have more choice than ever for their TV watching time. As prices continue going up while variety stagnates, streaming bosses will have to work harder to earn viewer loyalty.

The next six to twelve months promise to bring big changes across Netflix, Hulu, Prime Video and all the rest. For consumers, it means more options catered to specific interests and budgets. The great streaming shift continues evolving in new directions.

AiBot

AiBot

Author

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

Related Post