UK households are canceling streaming subscriptions in record numbers

British households have canceled video subscriptions in record numbers as they rein in non-essential spending to cope with the cost of living squeeze, heightening concerns about the end of a pandemic-fueled streaming boom.

Consumers abandoned about 1.5 million video-on-demand accounts such as Disney Plus, Apple TV Plus and Now in the first three months of the year, according to figures from analytics group Kantar.

While 58% of households retain at least one streaming service, down just 1.3% from the end of 2021, terminations suggest viewers have become more demanding about subscribing to multiple platforms.

The desire to save money was the biggest reason for cancellations and young adults became particularly reluctant to pay for television beyond the £159 annual license fee, the researchers found.

The results were “sobering” for streaming providers, said Dominic Sunnebo, global chief information officer at Kantar. He said streaming services needed to prove their worth to consumers “in what has become a fiercely competitive market.”

Households are looking for ways to reduce their budget to cope with rising bills. Soaring energy, clothing and food prices pushed inflation to a 30-year high in March, data from the Office for National Statistics showed last week.

Media investors are increasingly concerned that the rapid global growth of video streaming – spurred by demand for home entertainment during the pandemic – has peaked.

Shares of Netflix, which is due to report first-quarter results on Tuesday, have fallen 43% so far this year as global subscriber numbers have disappointed.

Consumers are re-evaluating subscriptions in response to higher charges. Several suppliers have raised prices in markets, including the UK, in part to offset rising labor and facility costs that have made television and film production more expensive.

Among them is Netflix, which recently implemented its second round of UK price increases in 18 months, raising standard monthly subscriptions from £10 to £11.

At the same time, the options for UK viewers continued to expand. Recently introduced offerings include Peacock from Sky, which features content from NBCUniversal. Viaplay, the Scandinavian streamer, plans to launch in the UK this year.

Many consumers still sign up for streaming services. Kantar’s research, based on interviews with 14,500 people, found that around 3% of UK households had taken up a subscription in the first quarter.

However, this is a marked slowdown from the 4.2% recorded in the same period a year ago.

Cancellations, meanwhile, have accelerated from 1.2 million a year ago and 1.04 million in the last three months of 2021.

After budget worries, the most common reasons cited by those who canceled their subscriptions were that they weren’t using them often enough and that the platforms were running out of new shows they wanted to watch.

The net effect was that the number of households with at least one paid subscription fell by 215,000 from the previous quarter, to 16.9 million.

Britbox, Apple TV Plus and Discovery Plus had the highest churn, meaning they lost the most users on a raw basis.

Disney Plus saw the biggest jump in churn, Kantar said. Its quarterly churn tripled from the prior quarter to 12%.

Netflix and Amazon’s Prime Video had the lowest churn rates in the quarter. Kantar said it was a sign they were “the last to go when households are forced to prioritize”.

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