With streaming services becoming more expensive than cable, more U.S. consumers are canceling their subscriptions to streaming services like Apple TV, Discovery+, Disney+, and Hulu. According to a recent article in the Wall St. Journal, cancellation rates have been on the rise across all the top premium services over the past year. In November of 2023, streaming customer defections across premium streaming services rose to 6.3% from 5.1% the previous year.
The numbers show around 25% of U.S. consumers who subscribe to streaming channels like Apple TV+, Discovery+, Disney+, Hulu, Max, Netflix, Paramount+, Peacock and Starz have dropped at least three of them in the past two years. Two years ago, that number was only at 15%.
To hang on to clients, Netflix and Hulu are repacking their plans and looking at bundling their services with ad-supported plans and discounts.
The Wall Street Journal says many of these companies are under pressure to enhance their profits and stay clear of continuing to keep signing up users who cancel often.
Another way that streaming companies are looking to keep customers is to join forces with their competitors and offer group bundled deals, including discounts or several free months of streaming service.
For example, Hulu could charge around $7.99 a month for a service. But if a consumer wanted to save money by subscribing to a series that includes ad’s, that number drops to $2.99 a month.
Out of all the services, Netflix had the lowest cancellation rate of customers.
Netflix can charge a premium of $22.99-a-month, but now offers consumers a plan to lower it to only $15.49-a-month, which is their standard plan. But the lower cost also limits the number of devices that can watch the service at the same time.
Around 25% of those who cancelled a premium service normally reup their subscriptions within 4 months.
The Wall Street Journal reported that with inflation and the cost of goods still expensive, more people are subscribing to ad-supported plans to lower their costs.
In December, Verizon started to offer a bundle package for their clients that included ad-supported tiers of Netflix and Max for around $10 a month, which was $17.
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