Almost a fifth of UK SVOD customers considering cancelling subs
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| 20 October 2022
Bad news in the UK has arrived for leading streamers such as Netflix, Prime Video and Disney+ as research carried out by Yonder has found that as the cost-of-living crisis deepens, 19% see such platforms as a luxury the can live without right now.
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Moreover, 20% of subscription video-on-demand (SVOD) customers are considering cancelling their subscriptions and 39% of UK SVOD homes are worried enough about rising prices to be actively looking to reduce their overall spending. The research also found that 29% would be ‘much more likely to cancel’ if the price goes up. Those aged 35-54 were most concerned, as are those of higher social grades.

When comparing those subscribers who are considering cancelling to those who are happy to keep paying, the study showed that potential cancellers are almost twice as likely say ‘all SVOD services look the same; almost twice as likely to find SVOD services ‘difficult to use; almost twice as likely to say they ‘struggle to know which programme is on which platform; almost twice as likely to ‘not really understand the difference between the services.

In conclusion Yonder said thar SVOD service providers will need to be careful therefore that any price rises net positive revenue growth, as they will likely drive significant churn.

Of the big three SVOD services - Netflix, Amazon Prime and Disney+ - the research found all likely to be threatened with very similar levels of cancellation risk at around 16-18 per cent of their current subscriber base. And these were at the lower end of the spectrum for the industry. Pay-TV VOD products and the other SVOD services face as much as 20–50% of their current subscriber bases considering cancellation.

Yonder also suggested that cheaper advertising-funded tiers could be both part of the solution and part of the problem. Compared with the 20% of homes which were considering cancelling, some 17% of homes said they would be interested in cheaper ad-funded tiers. However, these were not all from the same demographics. Appeal for cheaper tiers was seen across all groups, including currently satisfied subscribers not looking to cancel, as well as non-subscribers looking to sign up. SVOD providers will therefore need to be careful to accurately model the net impact of introducing cheaper tiers.

“There is a clear opportunity here for SVOD providers to review their consumer propositions and competitor differentiation,” said Yonder Consulting co-CEO Manfred Abraham. “This can both help to make a significant difference to the short-term decisions of at-risk customers whilst ultimately leading to a more customer-led strategy which adapts to the changing landscape.”