Streaming services take a hit as inflation forces Brits to choose

Streaming services have exploded during the pandemic as people are forced to spend more time at home. With lockdown restrictions lifted, Britons canceled around 1.5 million subscriptions in the first three months of 2022, up around 500,000 from the previous quarter. More than a third did so to save money, according to a new report from media consultancy Kantar.
Inflation rising in the UK – which hit a 30-year high of 7% last month – has forced many households to cut non-essential spending, and subscriptions to video streaming platforms are firmly in the firing line.

“Households are beginning to seriously prioritize where and how their disposable income is spent,” the report says.

Kantar’s report showed the number of UK households with at least one subscription fell by 215,000 in the quarter, with a record 38% of customers also planning to cancel subscriptions in the next three months due money problems.

“The proportion of consumers planning to cancel [subscription video on demand] services and citing ‘wanting to save money’ as the main reason rose to its highest level ever at 38%, up from 29% in Q4 21,” the report said.

Rising energy and food prices are expected to reduce household disposable income by 2.2% per person over the next 12 months, according to the UK’s Office for Budget Responsibility. This is the biggest drop in living standards since 1956, when government records began.

Dominic Sunnebo, director of global knowledge for Kantar’s Worldpanel division, said the latest numbers were “sobering” for streamers.

“Evidence from these results suggests that UK households are now proactively looking for ways to save, and the SVoD market is already feeling the effects,” he said.

Viewers turned away from disney (SAY) at a much faster pace than Netflix and Amazon (AMZN) while customer churn tripled quarter over quarter to 12%.

Kantar estimates that Netflix – the world’s largest streaming platform – has around 12 million subscribers in Britain, representing between 5% and 6% of its global customer base.

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