Streaming Services Wrestle With Churn

Some 19% of subscribers to premium services—a group that includes Netflix, Hulu, AppleTV+, HBO Max and Disney+, among others—canceled three or more subscriptions in the two years up to June, according to The Wall Street Journal citing new data from subscriber-measurement firm Antenna. That is up from 6% in the two-year stretch ended in June 2020.

The average rate of monthly customer defections among premium services in the U.S. was 5.46% in July, up from 4.46% a year ago and 4.05% in July 2020, according to Antenna.

Many households signed up for multiple streaming services a few years ago as options in the marketplace proliferated, subscription prices were lower and the pandemic boosted demand for in-home entertainment. Slowly but surely, they have gotten more choosy and frugal.

Some consumers cancel subscriptions when they finish a hit series on a service, then switch to another that has something else compelling. Among people who have canceled multiple services, a substantial portion “are people trading shows,” said Jonathan Carson, co-founder and chief executive of Antenna. “They come in, watch, cancel and go.”

Others lose interest when their favorite content is no longer available on a platform, or simply want to cut back on entertainment spending, analysts say. Pocketbook pressures from an economic downturn could make households even more budget conscious.

Appetite for streaming remains high. The number of subscriptions per person is rising in the U.S., according to Antenna. But there is more competition among the services for new customers, especially in the mostly saturated U.S. market.

The percentage of Netflix subscribers who signed up in January and were still subscribers six months later fell to 55% in 2022, compared with 62% in the same period of 2021 and 71% in 2020, Antenna found. Loyalty of longtime customers has waned, too: People who have had Netflix subscriptions for two to four years accounted for 18% of cancellations in the second quarter, up from 13% two years ago.

Antenna compiles data from third-party services that collect information from consumers, with their consent, such as online purchases, bills and banking records. That gives the company visibility into streaming subscriptions.