I have been as robust a booster of Apple TV+ since it started, and only partially because so many people I admire and like have worked there. I didn’t pay a penny for it for the first two years I had access to it, as at the time I was upgrading my devices and Apple was looking to build their subscriber base, so, like other hardware companies that expanded into the software business before them (that’s you, RCA, Microsoft and Sony), they didn’t really care about fully monetizing a growing area if they were successfully getting folks like me to drop several hundred bucks a year for something to watch or play it on. Even when that window of opportunity ran out, $4.99 a month was once a pittance to me.
Times have changed drastically though, and when Apple announced this week that they were raising their rate again to $9.99 a month, in concert with several other recent price hikes announced by Warner Brothers Discovery, Disney and Netflix, I reached my breaking point. I have been watching two things on the platform of late–MLS soccer and THE MORNING SHOW. Both their seasons will end in the next couple of weeks. So even though it’s still cheaper than their competitors, and especially since no one at that platform has bothered to pick up a phone in several years, the time has come for me to part ways with them. So sorry, folks, I’m done.
That said, I might still come back, especially when MLS starts their new season, or when something I want to watch actually drops. So we’re not breaking up for good, we’re, in the immortal words of Ross Geller, going to be “on a break”.
And, apparently, I’m not alone in that behavior, as MEDIAPOST’s Wayne Friedman reported earlier this week:
Streaming consumers who regularly cancel their premium streaming platforms — and then sign up again — keep rising, according to Antenna.
For the 2023 year-to-date, the research analytics company for subscription businesses said that of all “new” sign-ups for any of ten top streaming platforms, 33% come from “serial churn” customers.
This refers to repeated users who cancel a premium service three or more times in the previous two years — up from 29% in 2022, 23% in 2021, and 15% in 2020.
Data for premium streamers includes Apple TV+, Discovery+, Disney+, Netflix, Max (formerly HBO Max), Hulu, Paramount+, Peacock, Showtime, and Starz.
Antenna says it excludes streaming sign-ups of free tiers, as well as streaming apps distributed by cable, satellite, or telco distributors.
The study was referenced by several of the presenters at Tuesday’s ARF conference, and also caught the attention of other media pundits, including the always astute Alan Wolk of TVREV, who pointed out these key implications:
Churn is still a major issue. The fact that the number of serial churners is up from just 10 percent of all new SVOD acquisitions in 2019 seems to indicate that this sort of behavior is becoming ingrained. That is a bad sign in general, but a particularly bad sign for SVOD services with an ad-supported tier, e.g. all of them, because it makes it hard for them to guarantee audiences more than a few weeks out.
And TV Tech’s George Winslow added:
“These behaviors are of critical importance for operators to understand, as they can reveal clues for how to best market to consumers in an effort to bolster lifetime value (LTV),” of a subscriber Brendan Brady, media and entertainment lead at Antenna explained in a blog post.
There is some solace to be taken from the fact that in an ecosystem where, unlike cable, it’s relatively easy to cancel it’s also relatively easy to return. New shows, special events or even an occasional resurrected gem can woo a serial churner back. But the data also revealed that, like a uranium isotope, there are additional challenges in keeping those you who do come back even as long as was their first go-around. Winslow:
Nearly a quarter of these users were “won-back” within three (3) months after canceling. However, the loyalty profile of users can vary significantly across lifetimes, Brady wrote.
“In aggregate, users who subscribed to a Premium SVOD service for the first time between Q1’21 and Q1’22 had a 12 month survival rate of 45%,” he wrote. “That survival rate dropped -9pts to 36% for users on their second lifetime, and -19pts to 26% for users on their third or more lifetime.”
And this is before the impact of a summer’s worth of non-production is fully felt, let alone the full brunt of the most recent series of price hikes that is bringing to light the reality that much as there wasn’t a bottomless pit of funds to continue to produce new content, there is also a limit to how much most consumers are willing to spend on any of it.
So it now becomes a potentially endless battle to continue to drag subscribers back and forth, with the knowledge their wanderlust grows even with success. That means there is not only a need for compelling content, there is also a need for more compelling marketing to make them aware of the next value proposition.
And if you’re a service under particular pressure to manage costs and optimize ARPU, you’re feeling even more pressure.
Wolk offered some intriguing ways for how some of the more struggling services may actually be offering a template to the best-in-class–read that as the tech-based upstarts– to better seize upon these opportunties:
The balancing act seems like it might be easier for some services to pull off than others. Max and Paramount+, for example, have established sub-brands in HBO and Showtime that serve as destinations for that sort of more critic-friendly content. It gives them a way to keep those shows separate from their other programming, and, more importantly, makes it easy for viewers to wrap their heads around the fact that the services are home to a number of very distinct genres. Which, given that the SVOD services are all ultimately going to wind up becoming iterations of the full pay TV bundle, with news, sports and entertainment programming, is not a bad thing. If you are one of the other streaming services, you need to create your own version of HBO and Showtime. It can just be a submenu or a little icon that calls out “Netflix Gold” or similar and lets people know that this is where they can find your version of HBO.
Assuming, of course, there is any consensus of what is actually “gold”. Because much like options for a balanced diet, there is often little consensus as to what is truly good for you.
I do know this much. All that churn can’t be healthier than a little cereal–er–serial.
Enjoy your breakfast.
Until next time…