NEW ROCHELLE, NY—New data from Horowitz Research indicates that the crackdown on password sharing and significant price hikes by major streaming companies is convincing many consumers to cancel or churn out of their subscription streaming services.
It’s new State of Media, Entertainment & Tech: Subscriptions 2024 report found that half of TV content viewers (52%) have canceled or lost access to at least one of their SVOD services within the past year.
Among those who canceled or lost access within the past 12 months, the main reasons cited include efforts to cut subscription costs, recent price hikes, and perceived lack of value for the cost. Notably, for almost 3 in 10 viewers who canceled, not being able to share or borrow log-ins was a contributing factor.
The crackdowns and rising prices are also having an impact on consumers’ wallets: About one third (35%) of streamers surveyed report that they are paying more this year than they were last year for streaming services, and self-reported average spend on SVODs increased from $49.33 reported in the 2021 study to $60.60 in the 2024 edition of this report, the researchers reported.
This is boosting interest in ad supported streaming services. Nearly 6 in 10 streamers (59%) expressed receptiveness to ads if it means paying less for their subscriptions. In fact, now that Netflix has been offering a $6.99 tier with ads, almost 1 in 3 streamers in the study who have Netflix say they are on the ad-supported tier of service.
The rising prices and the crackdown on password sharing is also likely to keep churn or cancelation rate high this year, the study found. Almost 1 in 4 (23%) streamers plan to cancel one or more of their SVODs in the coming months, an increase from 19% who intended to churn in 2023. Among those who plan to cancel, Netflix is the service most often mentioned as being on the chopping block.
“The economics of the streaming business demand that these companies crack down on password sharing in order to continue to deliver the great content audiences want,” notes Adriana Waterston, executive vice president of insights and strategy at Horowitz. “That said, given rising costs for streaming, consumers will become more and more judicious about how they are spending their money in the streaming ecosystem. To avoid churn, subscription streaming services will need to focus on smart windowing strategies to keep audiences consistently engaged with their content and be proactive about helping consumers downgrade to lower-priced and/or ad-supported tiers as soon as they see a subscriber’s viewership and engagement dropping.”
The full State of Media, Entertainment & Tech: Consumer Subscriptions 2024 study tracks the evolution of the pay and free TV, streaming, internet, and mobile environment, including MVPDs, vMVPDs, SVODs, AVOD, FAST, OTA, and 5G. This study examines what services consumers pay for and use (and which ones they are sharing), how they are bundling traditional and new services, satisfaction with the services they have, and plans for the future. The survey was conducted in January-February 2024 among 2,202 TV content viewers 18+ who are heads of household. The survey was offered in English and Spanish. The report is available in total market, FOCUS Latinx, FOCUS Black, and FOCUS Asian editions.
More information about the State of Media, Entertainment & Tech: Subscriptions 2024 report, is available here.
