Streaming Platforms Struggle to Retain Customers in the United States

Net Subscriber Additions Fall to Lowest Level in Two Years

According to a new report by Samba TV, streaming platforms are struggling to retain customers in the United States. The report revealed that the level of net subscriber additions fell to its lowest level in two years in the first quarter of 2024.

The report highlighted that 44% of households only wanted to watch one or two platforms, and the number of net additions dropped by 3.3m or 41% year-on-year. This is despite individual platforms reporting quarterly subscriber gains.

Platforms Adopt Cycling as a Way of Life

The report found that platform users were adopting cycling as a way of life, churning out of a membership after only viewing one show. However, Netflix demonstrated the most “stickiness” in a sample of the 50 most watched originals in the first half of the year.

Inflation and Price Hikes Contribute to Churn

Inflation is a key driver in household spending decisions, and monthly price hikes at the platforms this year are likely to have been a factor in churn. However, the report does not mention this.

Netflix Leads in Engagement

Of the leading platforms, Netflix enjoyed the highest proportion of viewers who watched more than two originals – 70% – and the lowest proportion of viewers watching only one original, 30%. This compares to Apple TV+ (57% who watched two or more and 43% who watched only one) and Prime Video (56% vs. 44%).

Bundling and Live Events Strategies

Industry executives have been aware for some time that bundling prevents churn. Antenna research shows that subscribers who sign up to the Disney bundle (offering Disney+, Hulu and ESPN+) and Apple One (Apple TV, Apple Music, Apple arcade and iCloud storage) are less likely to churn out than those who signed up for individual platforms.

Programming live events is another strategy the platforms are adopting to retain members. Samba TV gathered its data from a research panel of three million smart TVs embedded with its proprietary Automatic Content Recognition technology across 24 of the top Smart TVs.

Conclusion

The report highlights the challenges faced by streaming platforms in retaining customers in the United States. While individual platforms may report quarterly subscriber gains, the overall trend suggests that platforms are struggling to retain customers. The adoption of cycling as a way of life, inflation, and price hikes are likely contributing factors to churn. However, platforms that offer bundling and live events may be more successful in retaining customers.

FAQs

Q: What is the current state of streaming platforms in the United States?
A: The level of net subscriber additions has fallen to its lowest level in two years in the first quarter of 2024.

Q: Why are streaming platforms struggling to retain customers?
A: The report suggests that the adoption of cycling as a way of life, inflation, and price hikes are likely contributing factors to churn.

Q: Which platform has the highest engagement rate?
A: Netflix has the highest engagement rate, with 70% of viewers watching more than two originals.

Q: What strategies are platforms adopting to retain customers?
A: Platforms are adopting bundling and live events strategies to retain customers.