Customers Canceling Streaming Subscriptions at Higher Rate as Services Increase Prices
Customers canceling their subscriptions to streaming services are on the rise as companies like Disney+, Netflix, and Hulu continue to hike their prices, according to a report.
The desertion of premium streaming services rose to 6.3% in November compared to 5.1% a year earlier. This increase in cancellations is attributed to the rise in prices of popular streaming services.
Data from analysis firm Antenna shows that the combined cost of monthly subscriptions for services like AppleTV+, Amazon Prime Video, HBO Max, Peacock, Paramount+, Netflix, Hulu, and Disney+ amounts to $112.42, driving many users to reevaluate their streaming subscriptions.
“The streaming services are raising their rates, and it feels like, ‘Do I pay for cable?'” said Crystal Revis, a mother from Florida who is struggling to manage her household bills amidst the rising cost of streaming services.
In response to the cancellations, streaming companies are trying various tactics to retain customers. These include offering lower subscription levels with advertising, partnering with rivals for bundled deals, and providing discounts or months of free service.
Some customers, like Beni Goldberg from Texas, have opted to switch to lower-cost subscription plans to manage their personal bills. Goldberg switched from a premium Netflix plan to a standard plan and canceled sports add-ons to his YouTube TV during offseasons.
While the lower-cost plans may entice some users, many customers are reducing their services altogether to manage their personal expenses. “I’m focusing on what my family and I watch more,” said Goldberg.
According to Antenna, customers often return to streaming services once more attractive content becomes available. This is the driving force behind the introduction of lower-priced plans that include advertising, which is an attempt to attract and retain customers.
For example, Disney+ reported that nearly 60% of new customers opted for the tier with advertising, up from 25% in December 2022. Similarly, on Netflix, more than a third of new customers in November opted for the level with advertising, compared to 11% the previous year.
As streaming companies attempt to entice customers with bundled deals and lower-cost plans, many customers are evaluating whether the content available on these platforms justifies the high prices.
Brendan Byrne, a father from Boston, expressed his concern about the value of some of his streaming subscriptions. “The lack of content is evident in all of these streaming services right now,” said Byrne. “We’ll reduce some of them. We’re just not using them.”
The increase in cancellations and shifting customer preferences reflect the ongoing battle between streaming companies to retain and attract customers through competitive pricing and attractive content offerings.