Say you sign up for HBO Max to watch “The Flight Attendant”.
The season of eight distractions is coming to an end and you are looking for your next binge-watching solution. Maybe you turn on “Wonder Woman 1984” or watch “The Sopranos” again. How long before you go to the sign-in tab of your Apple device and drop the $ 15-a-month app?
A month? A week? N day?
This is the issue that media and entertainment companies are facing as the battle for a streaming audience enters a new phase. During 2019 and 2020, studios launched Disney +, HBO Max, Peacock (which have both paid and free levels), Apple TV +, Discovery + and others, all betting on original, exclusive programming to attract users. The coronavirus crisis has been a boon for the streaming industry as movie theaters, concert halls and sports venues continue to suffer.
The problem is that because it’s so easy to cancel, these services see many people leave after watching the programs that convinced them to sign up in the first place. The phenomenon, known in the industry as ‘churn’, is a growing headache in the flowing wars, according to a new report released by professional service giant Deloitte on Monday night.
According to Deloitte’s survey of 1,100 people in October, 46% of respondents canceled at least one streaming service in the past year. This is a dramatic increase from the 20% who said in a similar survey in January that they had canceled a service. Of the people surveyed who canceled a streaming subscription, 62% did so because they completed the program or movie they signed up to see, Deloitte said.
According to the data, it is becoming more difficult for media and entertainment companies to retain subscribers as competition intensifies, Kevin Westcott, Deloitte’s US leader in technology, media and telecommunications, said in an interview. Because there are so many services available, it is not enough to have exclusive content to keep people on board.
Streaming subscribers had an average of five services in October, compared to the three they had before the COVID-19 pandemic. The surge in streaming subscriptions may seem like good news for media and entertainment businesses, but it also means people are abandoning services faster as their budgets tighten.
“The competition for streaming services is moving to another level,” Westcott said. ‘For the past few years, the focus has been on exclusive, original content. In 2021, it’s going to come down to the user experience and you feel like a special GDP to be a member. ”
The best services have indeed kept their focus on expanding their catalogs with movies and programs. Netflix, which reported quarterly revenue on Tuesday afternoon, last week unveiled a schedule for 70 movies for 2021 with a promotional video promising ‘New Movies’. Every week. All year round. The company Los Gatos, California, has made an effort to maintain a steady stream of fresh series to the service, including ‘The Queen’s Gambit’ and ‘Bridgerton’.
Disney + is expanding its programming scheme with the goal of launching 100 new titles a year. The Burbank company on Friday unveiled ‘WandaVision’ from Marvel Studios, a clever delivery series based on characters from its film franchise ‘Avengers’. AT & T’s WarnerMedia tried to boost HBO Max by moving its 2021 movie platform to the service for free on the same day they appeared in theaters, including “Dune” and “In the Heights” ( for limited current consumption).
Managers acknowledge the fickle nature of the audience.
Ann Sarnoff, chair of WarnerMedia Studios and Networks, said at the Consumer Electronics Show last week that the streaming business is forcing companies to consider other measures of success than the box office and other easy-to-understand measures, such as ratings.
“In the streaming world, it’s a very different set of criteria,” she said in her Wednesday main interview with MediaLink founder and CEO Michael Kassan, citing factors including subscribers and overall engagement with the service. ‘
Westcott predicts that in 2021, businesses will increasingly try to improve users’ experience on their applications by enhancing data usage and recommendation technology. Streamers have much greater access to their customers’ preferences than traditional TV channels, which can also help them improve the way they target ads when it’s part of their business.
Indeed, free, ad-based services became increasingly popular during the pandemic as paid streamers, according to Deloitte, expanded the limits on entertainment spending. Well-known free services include Tubi from Fox Corp, Pluto TV from ViacomCBS and the Roku Channel.
Deloitte reports that 60% of respondents said they use an ad-supported service in October, compared to just 40% in January. Of those who dropped a streaming subscription, 23% said they did so because they could find the content they wanted in a free, ad-based video-on-demand app, compared to 14% who said they were recording it in a Power.
“The one thing consumers have told us over and over again is, ‘I will not pay more than I used to pay for linear television,'” Westcott said, referring to the cable and satellite TV bundles to which streaming services were supposed to be a cost-effective alternative. “People find that ad-supported platforms have good content.”