From hero to zero: streaming giants struggle to avoid churn; If you’re paying for a platform, demand the best broadband
“One day you’re cock of the walk, the next a feather duster.” The presenter Piers Morgan’s mantra could easily be applied to Netflix, which has seen $170 billion wiped from its stock market value since the start of the year. The streaming giant, a big winner during the pandemic, lost customers for the first time in a decade in the first quarter of 2022 as a result of account sharing and increased competition for eyeballs, not least from Morgan’s new employer Talk TV.
We have Netflix to thank for helping to develop the box-set binge with its long-running hits such as House of Cards and Orange Is the New Black. But the platform is cancelling its own shows much earlier than it used to, according to analysis published by The Times. This is believed to be another factor putting off subscribers.
There are growing economic pressures too. The number of British households that subscribe to at least one streaming video on demand service has fallen over the last three months, according to market research firm Kantar, which said the cost of living crisis had led households, especially younger ones, to deprioritise entertainment. Its figures show that 1.51 million streaming services were cancelled during the first quarter of 2022, up from 1.04m the previous quarter and 1.20m a year ago, with more than half a million cancellations attributed to “money saving”. With household energy bills rising by 50 per cent in April and expected to rise again in October, more accounts will be switched off over the coming months.
Netflix and Amazon have the advantage of being seen as “hygiene” providers and may well be the last to go when households cut back on services. Rivals such as Disney, Now, Discovery+ and BritBox had much higher churn rates in the first quarter, according to Kantar. They all have plenty to do to persuade consumers they are indispensable in the longer run.
Regardless of which streaming services consumers retain in the coming months, they should make sure their broadband is up to the challenge so they can enjoy their favourite shows to the full without any lag. If households are cutting back to make ends meet, the very least they should expect is value for money from their connectivity.