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Suppose you sign up for HBO Max to watch “The Flight Attendant”.
The eight-episode season comes to an end, and you’re looking for your next excessive viewing fix. Maybe you turn on “Wonder Woman 1984” or watch “The Sopranos” again. How long before you go to the Subscriptions tab of your Apple device and delete the app at $ 15 per month?
A month? One week? One day?
This is the problem facing media and entertainment companies as the battle for audience streaming moves into a new phase. In 2019 and 2020, the studios launched Disney +, HBO Max, Peacock (which has both paid and free levels), Apple TV +, Discovery + and others, all betting on original and exclusive programming to attract the users. The coronavirus crisis has been a boon to the streaming industry as cinemas, concert halls and sports arenas continue to suffer.
The problem is, because they’re so easy to cancel, these services see a lot of people leave after they’ve finished watching the shows that convinced them to sign up in the first place. The 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 have canceled at least one streaming service in the past year. That’s a dramatic increase from the 20% who said in a similar January poll that they had canceled a service. Of those polled who canceled a streaming subscription, 62% did so because they completed the show or movie they signed up for, Deloitte said.
Data suggests that it is increasingly difficult for media and entertainment companies to retain subscribers as competition increases, said Kevin Westcott, U.S. technology, media and telecommunications leader at Deloitte, in an interview. With so many services available, having exclusive content alone isn’t enough to keep people on board.
Streaming subscribers said they had an average of five services in October, up from three they said before the COVID-19 pandemic. The surge in streaming subscriptions may sound like good news for media and entertainment companies, but it also means people are dropping services faster as their budgets are stretched.
“The competition for streaming services is going to a different level,” Westcott said. “In recent years, the focus has been on exclusive and original content. In 2021 it will depend on user experience and feel like a special VIP to be a member. “
The best services have indeed continued to focus on growing their film and program catalogs. Netflix, which releases its quarterly results Tuesday afternoon, last week unveiled a schedule of 70 films for 2021 with a promising promotional video “New Movies.” Every week. All year round. ”The Los Gatos, Calif., Company has strived to maintain a constant stream of new series coming to the service, including“ The Queen’s Gambit ”and“ Bridgerton ”.
Disney + is stepping up its programming, with the goal of introducing 100 new titles per year. On Friday, the Burbank Company introduced Marvel Studios’ “WandaVision”, a clever spinoff series based on characters from its “Avengers” movie franchise. AT & T’s WarnerMedia has sought to boost HBO Max by moving its slate of 2021 films to the service at no additional cost the same day they hit theaters, including “Dune” and “In the Heights” (for release in limited continuous).
Leaders recognize the fickle nature of the public.
Ann Sarnoff, president of WarnerMedia Studios and Networks, told the Consumer Electronics Show last week that streaming business is forcing companies to consider measures of success other than the box office and other easily understandable metrics, such as the notes.
“In the streaming world, it’s a completely different set of criteria,” she said during her interview with MediaLink founder and CEO Michael Kassan, referring to factors such as subscriber churn rate and “overall engagement with the service”.
Westcott predicts that companies will increasingly try to improve the user experience on their applications in 2021 by improving the use of data and recommender technology. Streamers have much greater access to their customers’ preferences than traditional TV channels, which should also help them improve their ad targeting, if that’s part of their business.
Indeed, free advertising-based services have become increasingly popular during the pandemic as paid broadcasters have extended limits on users’ entertainment spending, according to Deloitte. Well-known free services include Tubi from Fox Corp., Pluto TV from ViacomCBS, and Roku Channel.
Deloitte reported that 60% of respondents said they used an ad-supported service in October, up from just 40% in January. Of those who gave up a streaming subscription, 23% said they did so because they could find the content they wanted to watch on a free ad-based video-on-demand app, compared to 14. % who said they had done so in a May survey.
“The one thing consumers have told us time and time again is, ‘I won’t pay more than what I used to pay for linear TV,'” Westcott said, referring to the TV offerings by cable and satellite to which streaming services were supposed to be a cost effective alternative. “People are finding that ad-supported platforms have good content.”
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