Show Me The Money: The Churn In Streaming

Flexibility. It isn’t only for TV advertisers and TV distributors. Consumers want to get in on the act. Turns out, they have been using it a lot in streaming.

Rocketing initial interest in subscription streaming platforms has created good, top-line news. But perhaps also some dings.

At the end of 2020, so-called “churn” data -- where subscribers dropped existing platforms, perhaps to sign onto newer streamers -- has risen to an eye-popping 20%, from 15%.

A report from Interpret says: “The interruption in content, household income and viewing behavior, along with heightened competition, has led to changes in how consumers value and evaluate video offerings.”

Other analysis for the rise: Consumers might be waiting for their favorite TV show -- or anticipated movie -- to return. Also, consider those finicky “trial” periods that streamers have been offering.



During their respective launches in November 2019, Disney+ and Apple TV+ -- each offered trial periods deals, which included discounted and/or free add-ons to existing broadband and communications subscriptions.

Analysts were somewhat concerned after these introductory periods ended, new services could lose steam. That wasn’t the case  for Disney+ -- it has witnessed soaring, over-delivery in subscriber/revenue growth. The jury is still out for Apple TV+.

The overarching trend line is modern streaming consumers are moving to have -- and keep-- anywhere from two to four of these new streamers.

Big double-digit percentage churn rates seem to be a warning sign to some, especially when compared to HBO and Showtime -- the premium cable TV network brands. They are at a much lower churn level -- a 7% number -- for the second half of the year, even as those numbers have bumped up recently from a 5% level, according to Interpret.

But consider the historical life cycle of these two businesses -- streaming versus pay TV -- are at vastly different points. Also factor in streamers immediate, online, no-drama, cancellation process, which consumers are leaning into. Cable TV cancellation options have been historically much harder.

So far -- among bigger existing streaming platforms -- subscription revenue appears not to have witnessed any big volatile moves. So if there’s true sizable flexibility afoot, wait for the revenue alarm bells to ring.

Next story loading loading..