Cost of living crisis shrinks British streaming market
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Joseph O'Halloran
| 19 April 2022



As petrol, utility and food bills go through the roof and British households scramble to focus on essentials, spending on streaming video is increasingly a luxury that many can no longer afford according to research from Kantar.
Kantar 19April2022
The analyst’s Entertainment on Demand study said plainly that with inflation in the UK hitting 6% during the first quarter of 2022, and further rises in energy and fuel costs likely, Kantar said that it had evidence that households were starting to seriously prioritise where and how their disposable income is spent.

The research revealed thar the overall household penetration rate for Britain’s streaming market declined for only the second time ever, with16.9 million or 58% of British households now having at least one paid subscription, down 215,000, quarter-on-quarter.

While churn rates increased almost across the board, there was a clear difference in scale of attrition besides Netflix and Amazon. The first two SVOD services were described as ‘hygiene’ subscriptions, the last to go when households are forced to prioritise spend. In contrast, Disney+, NOW, Discovery+ and BritBox all saw significant jumps in churn rates quarter on quarter. The reasons behind churn also indicate inflation is top of consumers’ minds, with a third of those who cancelled an SVOD service in the quarter saying it was ‘to save money’, a jump from 28% the previous quarter.

Planned SVOD service cancellation was rising, with ‘wanting to save money’ the driving factor accounting for 38% of planned cancellations in Q2. This was reinforced by the lowest ever rate of new subscribers - just 3.0% of households signed up to a new SVOD subscription over the quarter, down from 4.2% a year earlier.

The study also revealed that for the three months to March 2022, 1.51 million SVOD services were cancelled by households in the first quarter of 2022, up from 1.04 million the previous quarter and 1.20 million a year ago. More than half a million cancellations were attributed to money saving. The proportion of consumers planning to cancel SVOD services and stating the primary reason as ‘wanting to save money’ has risen to its highest ever level at 38%, up from 29% in Q4'21.

Streaming service penetration rate for GenZ households fell slightly for the first time, down to 74.6% compared to 75.4% in Q1 2020 and a peak of 75.8% in Q4 2021, while just 3.0% of households in Great Britain signed up to a new video streaming subscription in Q1 2022, compared with 4.2% during the same period in 2021.

“With many streaming services having witnessed significant revenue growth during the height of Covid, this moment will be sobering,” said Dominic Sunnebo, global insight director, Kantar, Worldpanel Division, commenting on the Entertainment on Demand study. “The evidence from these findings suggests that British households are now proactively looking for ways to save, and the SVOD market is already seeing the effects of this. As a result, it’s now more critical than ever that SVOD providers demonstrate to consumers how their services are indispensable in the home in what has become a heavily competitive market. New marketing and content acquisition strategies will likely need to be deployed to support this and avoid further churn.”