Customers canceled their streaming subscriptions at a higher clip than last year as services like Disney+, Netflix and Hulu jacked up their prices, according to a report.
Defections across premium streamers rose 6.3% in November from 5.1% a year earlier, the Wall Street Journal reported Tuesday.
Over the past two years, roughly 25% of those who subscribed to services that include AppleTV+, Discovery+, Max, Peacock and Starz have canceled at least three of those options — and increase from 15%, the outlet said, citing November data from analytics firm Atenna.
“With the streaming services increasing their rates like they are, it’s like: ‘OK, do I pay for the cable?’ ” Crystal Revis, a Lynn Haven, Fla., mother of six who is trying to balance the rising cost of living with household expenses, told the Journal as .
Streamers have been under pressure to improve profitability to offset the high costs of creating and licensing content without having to reacquire users.
They have tried a range of tactics to keep customers, including launching lower-cost ad-supported tiers, teaming up with rivals on bundled deals and providing discounts or free months of service.
Revis, who has already canceled Disney+, Paramount+, planned to end her subscription to Hulu, home to shows like “Faraway Downs” and “Only Murders in the Building,” but she decided to keep it because the service offered her six months of its ad-supported service for $2.99 a month — less than half the $7.99-a-month price.
Customers said they are downgrading services to keep their personal expenses down.
“I’m focusing on the ones that me and my family watch the most,” said Beni Goldberg, a father of two in North Texas, who typically watches movies and TV shows on Disney+ with his family on Friday nights.
Goldberg said he switched from a $22.99-a-month premium Netflix plan to its $15.49-a-month standard plan, which limits the number of devices on which his family can watch the service while also lowering the viewing resolution.
He also canceled sports add-ons to his YouTube TV subscription during the off-season of his favorite teams.
Analytics firm Antenna said many customers who canceled service return to the streamers when there’s more appealing content available.
“Retention doesn’t just mean holding on to a new subscriber the first time they get them. It’s about managing a relationship over a true customer lifetime,” said Jonathan Carson, co-founder and chief executive of Antenna, which compiles data from third-party services on the streamers using information such as customers’ online purchases, bills and banking records.
The ower-priced ad-supported plans offer streamers a way to reel in new customers and win back old ones.
The Journal reported that among the US customers who joined Disney+ for the first time in November or converted from a trial, nearly 60% opted for the ad-supported tier.
This was bolstered by Black Friday promotions and is up from 25% in December 2022, when Disney+’s ad tier was launched.
Meanwhile, at Netflix, more than one-third of new US customers in November opted for the ad tier, compared to 11% a year earlier when the ad-tier was introduced.
To further entice customers, companies like Verizon began offering customers a bundle that includes the ad-supported tiers of Netflix and Max for about $10 a month, instead of about $17.
While bunding does provide more value, customers are evaluating whether the content on the streaming services is worth the high price.
Brendan Byrne, a father of four in the Boston area, pays for streaming services including Netflix, the Disney bundle of Disney+, ESPN+ and Hulu, as well as Amazon Prime Video and Paramount+– on top of cable — but is starting to question the value of some of those subscriptions.
After last year’s ‘Hollywood writers and actors strikes, “the lack of content is evident across all of these streaming things right now,” he told The Journal. ‘Hollywood writers and actors strikes, “the lack of content is evident across all of these streaming things right now,” he told The Journal.
“We’ll cut back on a few of them,” Byrne said. “We’re just not using them.”