Just last weekend we were talking, right here at Last Movie Outpost, about streamers and you were sharing with us how many streaming services were too many. One thing coming through from our Outposters, loud and clear, was that nobody has any issues with signing up, binging content, then trashing the subscription and moving on, only returning when new content has built up again. Streaming churn.
It seems our Outposters are not alone in this habit. The Deloitte Global Consulting annual media report is effectively the bible of telecoms and media when they are figuring out future strategies.
The report pointed specifically to this, calling it “Subscriber Churn”.
They define this as the percentage of subscribers who discontinue their service and are replaced by new subscribers, or old subscribers returning. The report from Deloitte projects that over 150 million people globally will cancel a paid streaming subscription in 2022. That represents a “Churn Rate” of 30%. In the USA, clearly the home of the fickle people, that is as high as 38%.
Currently, streaming services are on month-to-month contracts which enable this behavior. If this becomes a problem then the fear, as a consumer, would be that these subscriptions get redesigned and start to take on the form of cellphone or broadband contracts, or even like your gym membership. A 90 day notice period and the cancellation function buried deep, and hidden well, on a website somewhere with a team of retainers ready to try and make you stay.
It’s not just Gen-Z who churn, it’s evident in almost all market sectors by age. Gen-X and Millennials have also been raised with streaming expectations. So it is an ingrained customer habit.
The report points to more subscriptions added overall than cancelled, with “lazy” subscribers staying on rather than canceling. So the average number of subscriptions per person will rise. As long as it can stay like this, the model hopefully will not change.
Fresh, good content with good value pricing should arrest streaming churn. It should be easy to figure out, but this is Hollywood.