Surveys show that online video subscriptions are liable to churn as customers look for value from their monthly bills. Almost 30 million subscribers to online video services in the United States, about a quarter of the total, have cancelled three or more services over the last two years, according to Antenna, a subscription research firm, as reported by the New York Times.

These serial churners hopscotch from one service to the next. A third of them resubscribe to a previously cancelled service within six months. They account for about 40% of all new subscriptions and cancellations, said Jonathan Carson, the chief executive of Antenna.

In the first quarter of 2024, Antenna estimates that there were 45.5 million gross additions to online video subscriptions in the United States. There were 41.3 million cancellations. That produced a net growth of 4.1 million subscriptions, which was the lowest quarterly growth in a year.

According to Antenna, 19% of gross additions were for Paramount+, followed by 18% for Peacock, boosted by live sports, while Netflix accounted for 14%.

The Antenna data is sourced from customer transaction records and banking data, which are used to model trends for the population.

The recent Digital Media Trends report from Deloitte found that households in the United States subscribing to online video services spent an average of $61 per month on four SVOD services. 36% of 3,500 Americans surveyed believed that the programming on online video subscription services was not worth the money.

Deloitte reported that the overall percentage of respondents who have cancelled any paid online video subscription service in the past six months has softened a bit, to 40% from 44% last year, although churn remains considerably higher at around 53% for younger generations, who also subscribe to and pay for more services.

Meanwhile, in the United Kingdom a YouGov survey of 2,000 adults found that 31% have cancelled or removed at least one online video service in the last 12 months, while 39% say they are likely to cancel at least one service in the next 12 months. Although not all of these will end up cancelling, that is 8 percentage points above the number of cancellations the previous year.

The subscription squeeze is led mainly by low usage and cost concerns. A separate YouGov survey found that 36% of respondents said that online video subscriptions would be one of the first cutbacks they would make in the face of budget squeezes.

One of the top reasons people gave for potentially cancelling a service is that they were simply not using it enough, cited by 40%.

Leading global services like Netflix, Amazon Prime Video, and Disney+ were less likely to be cancelled than national services like NOW and BritBox.

www.antenna.com
www.deloitte.com
www.yougov.com

Netflix added 9.33 million subscribers worldwide in the first quarter of 2024, which represents 16% growth in a year to just short of 270 million, with a claimed audience of over half a billion people. Quarterly operating income was $2.6 billion, up 54% on the same period the previous year. From 2025, when it could have 300 million subscribers worldwide, Netflix will no longer report quarterly subscriber numbers or average revenue, preferring to focus on revenue and free cash flow.

Netflix now has 269.60 million subscribers, or members as it prefers to call them. It added 2.53 million in the United States and Canada, to reach 82.66 million, with an average monthly revenue of $17.30. In the EMEA region there were 2.92 million additions to a total of 91.73 million, while in the LATAM there were 1.72 million additions for a total of 47.72 million, and in APAC the gain was 2.16 million and a total of 47.50 million.

The company no longer provides a forecast of its subscriber numbers, although it did concede that the gains in the second quarter of 2024 were unlikely to be as high as in the first.

There is still no sign of subscriber growth levelling off, even in the saturated market of North America, where Netflix added 5.83 million subscribers in 2023. Netflix is the market leader, although Amazon has announced that it has more than 200 million monthly viewers to its Prime Video service. Disney+ has 111 million subscribers, excluding another 38 million on Hotstar.

Noting that it would not report quarterly subscriber numbers from 2025, Netflix explained: “In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential. But now we’re generating very substantial profit and free cash flow.”

“We’re not going to be silent on members as well, Greg Peters, the president and co-chief executive told analysts. “We’ll periodically update when we grow and we hit certain major milestones, we’ll announce those. It’s just not going to be part of our regular reporting.”

Netflix produced $2.14 billion in free cash flow in the first quarter, its highest quarterly cash generation to date. It is forecasting around $6 billion in free cash flow in 2024, although it still has over $13 billion in long-term debt.

Ted Sarandos, co-chief executive, said that Netflix is in the very early days of developing its live programming. “On-demand streaming have been unbelievable for consumer choice and control, and it’s really put the controls of television back in the hands of consumers, which has been really phenomenal. But there’s also something incredibly magic about folks gathering around the TV together in the living room to watch something all at the same time. We believe that these kind of eventized cultural moments, like the Jake Paul and Mike Tyson Fight, are just that kind of television that we want to be part of winning over those moments with our members as well.”

There’s nothing quite like the shared family experience of a good fight. “It’s an opportunity for us to expand our advertising offering and give those brands access to these kind of culture-defining moments,” added his co-chief executive Greg Peters, without irony.

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Comcast is extending its NOW brand, originally developed by Sky in the United Kingdom, to the United States. NOW TV is available for Xfinity Internet customers and includes live and on-demand programming from over 40 networks, integrated FAST channels, and Peacock Premium, for $20 a month, with no long-term contract or credit checks.

NOW, was launched by Sky in 2012 as a pay-as-you go offering, originally known as Now TV. Similar services are also offered in Ireland, Austria, Germany, Switzerland, and Italy. In Germany it is branded WOW.

Comcast does not break out subscriber numbers, but the BARB establishment survey estimates that in the United Kingdom around 1.82 million homes, or 6.4% of households, had access to NOW at the end of 2023.

Comcast is using the NOW brand to launch a set of low-cost internet, mobile and online television products that customers can purchase month by month.

“Consumers have told us they want low-cost, easy-to-use connectivity and entertainment options that deliver the same reliability and consistency of our leading Xfinity services,” said Dave Watson, President and CEO of Connectivity and Platforms, Comcast. “With NOW, we’ve developed a new product construct from the ground up to be simple and easy for anybody who wants Internet, mobile or TV on their own terms without sacrificing quality.”

NOW Internet access is available on a prepaid monthly basis. Customers can sign up, pause, or cancel online at any time. NOW Mobile is a new prepaid service that includes unlimited 5G data combined with access to more than 23 million WiFi hotspots.

Initial customer trials for NOW Internet and Mobile have begun in Hartford, Houston, and Miami, with a national launch across all Comcast service areas expected in the coming weeks. NOW TV is available everywhere Comcast provides service.

Users can watch NOW TV at home on a web browser, Xumo Stream Box, Flex streaming TV Box, Apple or Android mobile device, FireTV, or any device that supports Chromecast or Apple AirPlay. They can also use Xfinity Stream app on up to three mobile devices at the same time.

The service includes channels and on-demand programming from over 40 brands, including BBC America and BBC News, A&E, AMC, Discovery, and Hallmark, as well as Peacock Premium, available through the Peacock app.

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www.xfinity.com