A Juniper Research survey found that some of the biggest names in streaming — including Amazon Prime and HBO Now — are shedding subscribers fast. Here's what's driving SVOD churn and why broadcast TV isn't dead yet.
A new survey from Juniper Research has found that some of the biggest names in Subscription Video on Demand (SVOD) are dropping customers at a surprising rate. The survey, released earlier this month, found that churn rates for such video streaming services as Amazon Prime and HBO Now are increasing.
1 What Is Churn?
Churn is the number of subscribers who drop a subscription in a given time period. The severity of churn for a content provider depends on a ratio of how much the provider spends in acquiring subscribers—advertising, low introductory rates, etc.—relative to the number of subscribers they lose. SVODs normally don't require contracts, so customers are able to dip into then jump out of them at will, when they don't meet their expectations.
Juniper found that Amazon Prime experienced a -2.9 percent churn rate in such key markets as the U.S. and United Kingdom. The research service reported a -19.2 percent churn rate for HBO Now across these same markets. On the other hand, Netflix experienced a positive adoption rate of 6.3 percent in the U.S. and a 7.7 percent gain in the UK.
2 Why Subscribers Keep Canceling
Part of the problem seems to be the proliferation of subscriptions, with the average person worldwide having three active subscriptions at any given time. The firm also found that non-contract viewers tend to cancel when they don't receive enough content, or receive content that they tend to judge as subpar. Like the proverbial vicious circle, SVODs then pay more to obtain better content, passing the cost along to subscribers, who then begin to question the overall value of their subscription and move toward cancellation.
“The use of multiple subscriptions suggests that no one provider offers enough to currently satisfy consumers,” said Juniper research author Lauren Foye in a statement. “Juniper finds a growing danger in users reducing, or switching SVOD subscriptions, as monthly fees inevitably rise as a result of ever-increasing content spend. Netflix alone is set to spend $13 billion this year.”
3 Broadcast TV Lives
For those who've been predicting the demise of broadcast television, the Juniper survey indicated otherwise. To help retain customers, Juniper recommended collaboration between over-the-top (OTT—that is, TV delivered via the Internet rather than through traditional satellite or cable) services and more traditional providers. It offered the example of Sky hosting Netflix content on its Q platform.
In addition, the research firm pointed to the lingering value of broadcast. It noted that while 40 percent of its UK respondents reported that they streamed live sports events, only six percent of those watch sports solely through online channels. Their main viewing of sports continues to be through broadcast television. Juniper urged a synergy between broadcast and online outlets to compete successfully with stand-alone OTTs.
Billshark can help you find hidden ways to save on your subscription services and traditional broadcast, as well as all your other bills. Let our sharks school over your bills to save you serious money.
Share:
Billshark · Bill Negotiation Experts Helping consumers and small businesses stop overpaying on recurring bills.
Frequently Asked Questions
What is subscriber churn for streaming services?
Churn is the number of subscribers who drop a subscription in a given time period. How severe churn is for a content provider depends on a ratio of how much the provider spends to acquire subscribers, through advertising and low introductory rates, relative to the number of subscribers it loses. Because SVODs normally don't require contracts, customers can jump in and out at will.
Which streaming providers are losing subscribers, according to Juniper Research?
According to the Juniper Research survey, Amazon Prime experienced a -2.9 percent churn rate in key markets like the U.S. and United Kingdom, and HBO Now saw a -19.2 percent churn rate across those same markets. Netflix bucked the trend, with a positive adoption rate of 6.3 percent in the U.S. and a 7.7 percent gain in the UK.
Why are SVOD subscribers canceling?
Juniper found that non-contract viewers tend to cancel when they don't receive enough content, or get content they judge as subpar. With the average person worldwide holding three active subscriptions, providers pay more for better content, then pass that cost to subscribers, who question the value of their subscription and move toward cancellation.
Does the Juniper survey predict the end of broadcast TV?
No. The Juniper survey indicated broadcast television is not dying. While 40 percent of UK respondents streamed live sports events, only six percent watched sports solely through online channels, with most still viewing through broadcast TV. Juniper urged synergy between broadcast and online outlets to compete with stand-alone OTTs.
How can Billshark help me save on streaming and TV bills?
Billshark can help you find hidden ways to save on your subscription services and traditional broadcast, as well as all your other bills. The company's negotiators, its Sharks, school over your bills to save you serious money so you don't keep overpaying for streaming and TV.
![36 Subscription Statistics You Should Know [Updated 2022]](https://cdn.billshark.com/www4.0/static/images/blogs/webp/medium/36-subscription-statistics-you-should-know.webp)
