Streaming-video services get a surge of subscribers when they launch a hotly anticipated show or movie. But many of these new customers unsubscribe within a few months, according to new data, a challenge even for the industry’s deep-pocketed giants.
The data, which subscriber-measurement company Antenna provided to The Wall Street Journal, illustrate the extent to which the streaming wars require all players to consistently churn out popular and often expensive programming to keep fickle subscribers satisfied.
“You constantly need new content,” said Michael Nathanson, an analyst for MoffettNathanson. Streaming services not only have to build vast libraries of old shows and movies, he said, they also “need a couple big, nice theatrical movies every quarter to make it feel like it’s really valuable.”
Major releases have been a reliable driver of streaming subscriptions, particularly for newer services. Walt Disney Co. ’s Disney+, for instance, won far more new U.S. subscribers when the musical “Hamilton” came out than any other day since early 2020, when the service was still getting off the ground.
AT&T Inc.’s HBO Max saw a jump in U.S. sign-ups when “Wonder Woman 1984” was released on Christmas Day 2020, according to Antenna data.
So did Apple Inc.’s Apple TV+ on the day “Greyhound,” a World War II movie starring Tom Hanks, came out in July 2020.
Many of them don’t stick around very long. Roughly half of U.S. viewers who signed up within three days of the release of “Hamilton,” “Wonder Woman 1984” and “Greyhound” were gone within six months, Antenna data show.
Even if streaming services only retain half of the users they sign up during big bursts, that still translates into sizable numbers of longer-term subscribers.
All streaming services see a portion of U.S. customers unsubscribe every month and have been signing up more users than they lose over time. But viewers who join a service right after a big release tend to leave significantly faster than the average streaming customer, according to an analysis of Antenna data.
Comcast Corp.’s Peacock, another service that entered the streaming arena in the past couple of years, saw a surge of U.S. sign-ups during last summer’s Tokyo Olympics, for which it had streaming rights. Four months later, roughly half of the U.S. customers who had joined around the beginning of the Olympics were gone, Antenna data show.
Comcast’s NBCUniversal unit, the parent of Peacock, declined to comment. Comcast last week said more than nine million people were paying to watch Peacock, on top of another seven million cable and broadband customers of Comcast and other providers who get the service free and are using it regularly.
Antenna is able to compile daily subscriber sign-ups to most streaming services by aggregating data coming from a series of third-party apps that help users manage their email inboxes or keep to a monthly budget. Such apps keep track of streaming-related transactions and emails confirming users’ decisions to sign up for or cancel a streaming subscription.
From a sample of five million U.S. users, Antenna extrapolates to build its projections, similar to what pollsters or other measurement companies such as Nielsen do. Antenna said users of those apps opt in to having their data used anonymously.
Streamers’ challenges are exacerbated by the fact that most services are available through a monthly subscription, making it easy for viewers to cancel when they are done binge-watching a specific show.
The proliferation of streaming services has given users an array of options. HBO Max, Disney+, Peacock, Apple TV+ and Discovery Inc.’s Discovery+ have entered the field since 2019, while ViacomCBS Inc. has rebranded and expanded its CBS All Access service, now known as Paramount+. All are fighting for market share with more established players including Netflix Inc., Amazon.com Inc.’s Prime Video and Disney-controlled Hulu.
American households subscribed to 3.6 streaming services on average last year, according to Kagan, a media research group within S&P Global Market Intelligence. The U.S. subscriber base of Netflix, the country’s largest streaming service, has plateaued in recent quarters, MoffettNathanson data show.
When it reported fourth-quarter results on Jan. 20, Netflix said it may be affected by growing competition, adding that it continues to grow in regions where competitors have launched. The company’s operating profit for the quarter shrank to 8.2% from 14.4% a year earlier. Netflix attributed the decrease partly to its larger programming lineup compared with the year-earlier period, when Covid-19 shut down some production. Netflix’s stock plunged by 22% after it forecast a significantly lower number of subscriber additions for the first quarter than it added a year ago, despite coming off a string of hit shows and movies.
“The cost to build, the cost to market and the cost to retain customers will all be going up in a competitive market,” Mr. Nathanson said.
Streaming services spent about twice as much on content—both to create originals and acquire the rights to old movies and shows—last year than they did in 2017, according to projections from Ampere Analysis, a research firm. Netflix alone planned to spend $17 billion on content last year, the company said in April.
More established services with larger libraries of content have shown higher subscriber-retention rates than new entrants.
“We always say that library titles tend to increase engagement and minimize churn,” Disney Chief Executive Bob Chapek said during a conference call with analysts in November, referring to the rate at which customers unsubscribe. “But new titles, new content, whether they’re movies or series, actually add new [subscribers.]”
Netflix experienced a large influx of new customers in the first few weeks of the pandemic in March 2020, when lockdowns left many people with more time to watch shows such as “Tiger King” from the couch. Another notable spike in sign-ups outside that period happened in early December 2020, when David Fincher’s “Mank” and the fourth season of cartoon comedy “Big Mouth” began streaming on Netflix.
Hulu, meanwhile, regularly attracts a wave of new U.S. sign-ups on Black Friday, when the service traditionally offers a steep discount. According to a review of Antenna data, one of Hulu’s highest-drawing shows is “The Handmaid’s Tale,” the dystopian series featuring Elisabeth Moss that is based on the Margaret Atwood novel.
U.S. viewers who signed up for Netflix when “Big Mouth” and “Mank” came out and for Hulu ahead of the fourth season of “The Handmaid’s Tale” have left at a slower pace than the ones who signed up for HBO Max, Apple TV+ and Disney+ right after the releases of “Wonder Woman 1984,” “Greyhound” and “Hamilton,” respectively, according to Antenna data. Unlike the other titles mentioned, the fourth season of “The Handmaid’s Tale” couldn’t be binged in one sitting: Its 10 episodes were released over the span of months. Apple and HBO Max also have episodic shows that are more likely to retain subscribers for longer, including HBO’s “Succession” and Apple’s “Ted Lasso.”
Not all successful shows draw spectacular subscriber numbers on day one. Some of the most popular streaming programs of the past couple of years, including “Ted Lasso” and Netflix’s “Squid Game,” were sleeper hits that required a few weeks of word-of-mouth to gain a big following in the U.S.
Antenna doesn’t track subscriber sign-ups for Amazon’s Prime Video because many subscribers join Prime for other Amazon benefits. The company’s projections only include users who have signed up for a service directly; they exclude some subscribers who join services as a result of an agreement with third parties such as wireless carriers.
Antenna’s executive chair Jonathan Carson, a former Nielsen executive, said Antenna was created because he and his co-founder, Chief Executive Rameez Tase, saw a business opportunity to provide reliable data for the movie studios and TV networks that were shifting toward video streaming.
This is the catch-22 of having tons of separate streaming services, many of which are specific to particular studios or networks, instead of a couple/few that most content gets released on (as was more or less the case before the studios/networks started making their own services)... with each of those services having content that a lot of people want to watch.
The average person is not going to sign up and pay for a half-dozen services or more at the same time because if they spend a lot of time watching one or two of them, then that is time spent NOT watching the others that they are still paying for.
I've subscribed to and canceled HBO Max a few times now with the various movies that got released directly there that would have been theater-only if COVID had never been a thing.
The only reason that I've been consistently subscribed to Disney+ is because I signed up for that initial 3-year deal (all paid upfront) at a huge discount when it first started. But if it wasn't for that, I could easily cancel it periodically, wait for a while for any shows that I want to watch to drop in full (with their gradual, weekly episode releases), and then sign up for it, binge the stuff I want to watch, and then cancel again for a while.
Even before reading this story, there were stories about Disney+ falling well short of projected growth, another recent story about Peacock losing absurd amounts of money, etc.
None of these stories really surprised me. Maybe time will prove me wrong on this, and I'm not saying that there isn't any future potential growth to be had, but I think each service provider is over-estimating how many people they can ultimately expect to be continuously signed up for their service at one time. And if the economics require them to have many more continuous subscribers than is realistically achievable in order to pay for the original content on the service (plus a solid profit), then at some point some of these services will either have to cease to exist or will end up focusing more on catalog content and/or lower-buget and (likely) lower-quality content so that they are able to be profitable.
The main problem with streaming services is that it's too many of them, and they're all trying to compete with one another. Everybody is jumping on the bandwagon, and it's just a complete mess. I don't subscribe to any of them because the A/V quality is inferior, you don't own the movies and you have to depend on the internet to access your collection. To hell with all of that! I'll stick with physical media.
Surely the studios can't be surprised? With the exception of maybe Disney+, the studio-based services aren't all that great. They don't churn out enough original content to keep people subscribed for more than the month they have like the wider ones like Prime and Netflix. And unless somebody just NEEDS to watch a certain show and needs to watch it week by week instead of waiting until it's done and watching it in the month they have it active, there's not going to be a ton of people subscribed for 8-13 weeks because they'll alternate.
“You constantly need new content,” said Michael Nathanson, an analyst for MoffettNathanson.
Nathanson, please.
I'm on a 4 month AppleTV+ trial. 100% will cancel after swallowing their content and spitting out the bones. Adapt some more I.P. or get out of the way, I guess?
This is the catch-22 of having tons of separate streaming services, many of which are specific to particular studios or networks, instead of a couple/few that most content gets released on (as was more or less the case before the studios/networks started making their own services)... with each of those services having content that a lot of people want to watch.
The average person is not going to sign up and pay for a half-dozen services or more at the same time because if they spend a lot of time watching one or two of them, then that is time spent NOT watching the others that they are still paying for.
I've subscribed to and canceled HBO Max a few times now with the various movies that got released directly there that would have been theater-only if COVID had never been a thing.
The only reason that I've been consistently subscribed to Disney+ is because I signed up for that initial 3-year deal (all paid upfront) at a huge discount when it first started. But if it wasn't for that, I could easily cancel it periodically, wait for a while for any shows that I want to watch to drop in full (with their gradual, weekly episode releases), and then sign up for it, binge the stuff I want to watch, and then cancel again for a while.
Even before reading this story, there were stories about Disney+ falling well short of projected growth, another recent story about Peacock losing absurd amounts of money, etc.
None of these stories really surprised me. Maybe time will prove me wrong on this, and I'm not saying that there isn't any future potential growth to be had, but I think each service provider is over-estimating how many people they can ultimately expect to be continuously signed up for their service at one time. And if the economics require them to have many more continuous subscribers than is realistically achievable in order to pay for the original content on the service (plus a solid profit), then at some point some of these services will either have to cease to exist or will end up focusing more on catalog content and/or lower-buget and (likely) lower-quality content so that they are able to be profitable.
Great post and dead on. A long time I ago I predicted that having too much proprietary content was going to make a mess of things. It sure has. It also can make those cost savings of cutting the cord get negated with too many streaming subscriptions if you aren’t careful.
It is no surprise at all that a lot of these services are one-hit-wonders. One show or film and then poof…. Half the subscribers are gone. Or worse, they used a free or reduced price trial to watch the show and then disappeared. I have Amazon prime, Disney and Netflix. That’s it. And I’d dump Amazon but we use the prime delivery a lot. Disney is clearly in the best position here due to owning several huge IPs like Star Wars and the MCU. Without those, who’d pay to watch animated classics and whatever? I doubt nearly as many people. But, Disney is the leader here and the price is great. If they keep the cost low then they are in the best position going forward, IMO.
There is just so much to watch. I can’t even keep up with it all. I have skipped and will skip numerous shows just for the lack of time reason. Enough is enough. Too much of it is similar anyways. Or, it’s just bad. If a show is really a monster hit I’m hoping they will get released on disc, regardless of what service it was on.
Quote:
Originally Posted by slimdude
The main problem with streaming is it's too many of them, and they're all trying to compete with one another. Everybody is jumping on the streaming bandwagon, and it's just a complete mess. I don't subscribe to any of them because the A/V quality is inferior, you don't own the movies and you have to depend on the internet to access your collection. To hell with all of that! I'll stick with physical media.
Yep, physical is the right way to watch and properly own your favorite content. I’m with ya. There are too many services though for sure. Even if a show pops up that looks interesting like Asimov on Apple TV or something on CBS….I ain’t signing up just for that. Or, if I did, I’d dump it immediately afterwards.
The same old articles from digital doom-mongers. Just talking about the infrequent negatives again and again to scare monger people.
Not a big deal. Just wait for few days for the hype to settle down and then watch when there is less traffic unless you paid a premium to watch it on that day.
This is a part of the service offering which comes with its own pros and cons. Just like going to the Cinema these days and being disturbed by the rowdy crowd around you ruining your experience or receiving that bad unplayable disc.
It’s weird for me when I see Prime thrown in there. I don’t know anyone who is Prime Video first, Amazon prime second. Everyone I know has a Prime account for shopping and it just happens to also have Video with it as well.
It’s weird for me when I see Prime thrown in there. I don’t know anyone who is Prime Video first, Amazon prime second. Everyone I know has a Prime account for shopping and it just happens to also have Video with it as well.
Same, delivery alone is worth it.
Aside from that, just Disney+ and Netflix for me. The latter of which hasn't been getting much use
Funnily enough, we have so many services now that I can see a few of them folding and combining content with others. Not necessarily a company buying out a company like Amazon did with MGM, but say Warner and Paramount agree to put their services together.
It’s weird for me when I see Prime thrown in there. I don’t know anyone who is Prime Video first, Amazon prime second. Everyone I know has a Prime account for shopping and it just happens to also have Video with it as well.
I subscribe to their video-only service occasionally to see things like The Expanse and The Boys, and then unsubscribe again. But I don't pay $120 for the Prime shipping stuff. It's easy enough to bundle stuff to go over $25 and get free shipping without Prime (if necessary you can add a Starbucks gift card or something). And where possible I'm trying to use alternative stores anyway because I don't like monopolies.
I subscribe to Netflix and Amazon Prime. My girlfriend pays for Hulu and Disney+. We get HBO Max for free through our ISP. Everything else we sign up for temporarily for exclusive content and then cancel after watching what we want or the trial membership ends. Don't see that changing anytime soon.
I would never pay for Prime if it was just the TV service. That is about the only one I have constantly. I will subscribe to Shudder for a month or two every once in a while, Netflix only when there is something I want to watch, I had HBOMax for a while but cancelled that. There just wasn't enough that I wanted to watch.
As mentioned, there are just so many companies involved now. I remember when Hulu first launched, it was basically just a website where you watched everything without having to sign-up or download anything. There are certainly a lot of options and that's fine. Mentioned it a few times before, but there are many thousands of free movies available on Vudu, YT, etc with ads. And the same goes with Tubi. A lot of people also don't know that Kino has their own free streaming platform. All-encompassing providers like Netflix and Hulu are a pretty easy decision, but the network-specific ones can be a tougher sale. I'd like to see more Black Friday sales on streaming like was the case to get Hulu for $0.99/mth and AMC+ for around twice that.
Last edited by meremortal; 02-08-2022 at 03:55 AM.
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