It happens to everyone. You sign up for a streaming service, watch the shows that drew you in, and then decide to cancel after a while. It’s called a churn rate, and streaming services experience this with their customers all the time. In fact, churn rates have been increasing lately. According to the Antenna Q1 2021 Growth Report, the average monthly Churn for Premium SVOD services (excluding Netflix & Hulu) went from 5.3% to 7.0% in the past two years.
Hulu’s Churn doubled over the same time period, increasing from 2.4% to 4.9%. One of the main factors contributing to customers canceling their streaming subscriptions is the explosion of new options that have recently burst onto the scene. What once was a small handful of streamers to choose from has become an array of new offerings, from Disney+ to Apple+, Peacock, HBO Max, Paramount+, Discovery+, and more. With so many diverse options, it’s only expected that viewers will bounce around a little bit.
However, Netflix is the gold standard for cementing itself as a staple in consumers’ streaming arsenals. The OG platform only saw a Churn Rate increase of .1% over the last two years, and leads the industry in ‘Resubscribe Rate,’ meaning that when they do lose a customer, they are more likely than competitors to win them back.
Why do people feel such a loyalty to Netflix? For starters, it’s been around since the time of DVDs. To many, it’s what they think of as the first streaming service to hit the market. Recent surveys also show that viewers consider Netflix to have the best original content out of all the streamers. Netflix was the top choice because the streaming behemoth offers a “broad selection of content” (55%), “good original programming” (51%), “adds content I like” (49%) and “no commercials” (46%). Netflix’s investment into content has increased by nearly 10% this year, according to Bankr, the streaming provider is projected to spend $19 billion on content in 2021.
Netflix still holds a large share of the market, although its margins are shrinking.
Two years ago, Netflix and Hulu accounted for 3 out of every 4 Premium SVOD Subscriptions. But in the past two years, they have grown just 8%, and so now account for 1 out of 2 Subscriptions.
The four other Premium SVOD services that were in-market two years ago – HBO Now (now HBO Max), Showtime, Starz and CBS All Access (now Paramount+) – still make up about 1 of 4 Premium SVOD Subscriptions. But to maintain that share level in the face of new competition, they have grown 100% in the past two years, and so now operate at much more substantial scale.