Let’s say you sign up for HBO Max to watch “The Flight Attendant”.
The eight-episode season ends and you are looking for your next dose of excessive episodes. Maybe you call “Wonder Woman 1984” or watch “The Sopranos” again. How long before you go to your Apple device’s subscription tab and discard the $ 15 per month app?
One month? One week? One day?
This is the problem that media and entertainment companies face as the battle for streaming audiences enters a new phase. During 2019 and 2020, the studios launched Disney +, HBO Max, Peacock (which has paid and free levels), Apple TV +, Discovery + and others, all betting on an original and exclusive programming to attract users. The coronavirus crisis has been a blessing for the streaming industry, as cinemas, concert halls and sports arenas continue to suffer.
The problem is that, because they are so easy to cancel, these services are causing many people to leave after finishing watching the programs that convinced them to subscribe. This phenomenon, known in the industry as “churn”, is a growing headache in streaming wars, according to a new report released Monday night by professional services giant Deloitte.
According to Deloitte’s survey of 1,100 people in October, 46% of respondents canceled at least one streaming service last year. This is a dramatic increase from the 20% who said in a similar survey in January that they canceled a service. Of those surveyed who canceled a streaming subscription, 62% did so because they finished the program or movie they had signed up to watch, Deloitte said.
The data suggests that it is becoming more difficult for media and entertainment companies to retain subscribers as competition increases, said Kevin Westcott, technology, media and telecommunications leader at Deloitte in the United States, in an interview. With so many services available, just having exclusive content is not enough to keep people on board.
Streaming subscribers reported having an average of five services in October, up from the three they reported having before the COVID-19 pandemic. The increase in streaming subscriptions may seem like good news for media and entertainment companies, but it also means that people are abandoning services more quickly because their budgets are tight.
“The competition for streaming services is shifting to a different level,” said Westcott. “In recent years, the focus has been on having exclusive and original content. In 2021, it will boil down to the user experience and you feel like a special VIP for being a member. “
The main services have in fact kept their focus on growing their catalogs of films and programs. Netflix, which reports quarterly earnings on Tuesday afternoon, last week released a schedule of 70 films for 2021 with a promotional video promising “New films. Every week. All year round. “The Los Gatos, California, has endeavored to maintain a steady stream of new series coming into service, including” The Queen’s Gambit “and” Bridgerton “.
Disney + is accelerating its programming, with the goal of releasing 100 new titles a year. On Friday, Burbank’s company presented Marvel Studios’ “WandaVision”, a smart series based on characters from its “Avengers” movie franchise. AT & T’s WarnerMedia sought to boost HBO Max by moving its list of 2021 films to service at no extra cost the same day they hit theaters, including “Dune” and “In the Heights” (for a limited display).
Executives recognize the changing nature of the public.
Ann Sarnoff, president of WarnerMedia Studios and Networks, said last week at the Consumer Electronics Show that the streaming business forces companies to consider measures of success beyond box office and other easily understandable metrics, such as ratings.
“In the world of streaming, it’s a completely different set of criteria,” she said in her main interview on Wednesday with MediaLink founder and chief executive Michael Kassan, referring to factors such as subscriber turnover and “general involvement with the service ”.
Westcott predicts that companies will increasingly try to improve the user experience in their applications in 2021 by improving the use of data and recommendation technology. Streamers have much more access to their customers’ preferences than traditional TV channels, which should also help them improve the way they target advertising, if that is part of their business.
In fact, free advertising-based services became increasingly popular during the pandemic, as paid streamers stretched users’ entertainment spending limits, according to Deloitte. Popular free services include Fox Corp. Tubi, ViacomCBS Pluto TV and Canal Roku.
Deloitte reported that 60% of respondents said they use an ad-supported service in October, compared to just 40% in January. Of those who abandoned the streaming subscription, 23% said they did it because they were able to find the content they wanted to watch in a free, ad-based video on demand application, compared to 14% who said they did it in a May Survey.
“The one thing consumers have said to us repeatedly is, ‘I’m not going to pay more than I used to pay for linear television,'” said Westcott, referring to the cable and satellite TV packages that streaming services should be on. an economical alternative. “People are finding that ad-supported platforms have good content.”