The rising cost of living in the UK has led almost 1m British households to cancel their subscriptions to streaming services such as Netflix, Amazon Prime, and Disney+, a new report by market research firm Kantar Worldpanel has found.
Between January and September, the number of UK homes that subscribe to at least one streaming service fell by 937,000. Around 16m UK homes now pay for at least one subscription, the Guardian newspaper reported.
Dominic Sunnebo, the global insight director at market research firm Kantar Worldpanel, told the newspaper that the main reason people were canceling was “the need to save money” and not even the release of two highly-anticipated reboots, Rings of Power and House of the Dragon, could pull audiences in.
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“The most recent quarter saw two of the most anticipated releases of the year, they ranked as the top two most enjoyed pieces of subscription video-on-demand content during the period, and yet we still saw a continuation of the negative trend of the market getting smaller,” he said.
Figures in the report state that Prime Video, Disney+, and Paramount+, which launched in the UK in March, made up the majority of new streaming subscribers in the third quarter, with 29.4%, 17.5%, and 24.6%, respectively, while Netflix continued to struggle with audiences. Netflix took only a 2.1% share of new subscribers over the recorded period, a fifth of the proportion for the same period last year.
“Generally speaking, Netflix loyalty has held up relatively well in a pretty tough market, but it is starting to see churn levels rise,” Sunnebo told The Guardian. “But the biggest problem Netflix is really struggling with is attracting new subscribers. Netflix needs to gain new customers, not just manage to stop them leaving.”
Next month the streamer will attempt to shake up the market with a new ‘Basic with Ads’ package aimed at attracting new subscribers. The £4.99-a-month ($6.99) option will launch in the UK and US on 3 November, more than a month before Disney’s December 8 rollout of their own ad-supported version of Disney+.
In a blog post, Netflix COO Greg Peters said there will be four to five minutes of ads per hour, with both series and feature films being interrupted by spots. However, Sunnebo told the newspaper that with the current impact on people’s finances, a cut in subscriptions might continue into the final quarter of this year.
“Consumers looked to have reached a stage where they had mostly cut the services they needed to cut and could manage that,” he said. “But what we have seen over the last few weeks and the impact on people’s finances means there may be more downward pressure in the final quarter this year.”
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