Costs have become a major reason behind canceling services like Netflix.
SOPA Images/LightRocket via Getty Images
The pandemic has led to changes in the way we buy groceries (hello, frenzy), how we eat out (goodbye, long, lazy lunches), and our hobbies (who would have thought making masks could be so fulfilling).
It’s also prompted changes in our media consumption—not just what we’re watching but how. People have always canceled and tried out new video services, but during the pandemic the churn rate has risen.
Now, new factors are impacting people’s decisions to subscribe to and unsubscribe to services. With the recent high-profile launch of HBO Max, and NBC’s Peacock on its way soon, the sooner media companies understand this new supply and demand, the better they will fare.
“It has been well reported, and our research confirmed, an increase of new subscribers to paid streaming video services, but what I found surprising was the rate of churn among subscribers,” says Kevin Westcott, vice chairman and U.S. telecom, media and entertainment sector leader at Deloitte. “We found that 17 percent of consumers canceled a subscription since COVID-19 began.”
Here are three reasons people are canceling video services right now.
1. Because of High Costs
Before the pandemic, Westcott notes, people tended to cancel services because they had finished watching the content they subscribed to see. For instance, they would get rid of Apple TV+ after streaming the full season of The Morning Show, though the service still has plenty of content to offer.
Now, Westcott says, the highest-ranked reason for canceling subscriptions is cost. “Consumers are becoming a little more cost conscious around their streaming video subscriptions,” he says.
2. To Find New Ways to Fill Free Time
Churn has risen in part because people are bored. Many have been home since March, and they’ve burned through all the shows that interest them on the video subscription sites they’ve had for years. With still more time to burn, they need something else to do.
“With furloughs, layoffs and shelter-in-place orders, consumers have had more free time for media and entertainment,” Westcott says. “For providers, the challenge is now about retention, and how to keep subscribers who have more options than ever and can easily move in and out of services but who also may be managing costs and subscription fatigue.”
That means someone may cancel Disney+ not because they dislike the service but because they want to try HBO Max for a while instead. The demand for content has never been higher.
3. In Response To Poor Content
If a service doesn’t have what it promised—a mix of new and old great shows—then consumers are no longer willing to wait around for improvement. Money concerns have given them an itchy finger. When they don’t like what’s offered, they move on quickly.
“The recipe for retention is still mostly the same: strong original content, a big library of existing shows, and discovery features that offer relevant content to viewers wondering what to watch next,” Westcott says.