U.S. Streaming Users Often Cancel and Resubscribe, But Bundles Help Reduce Churn.
In the competitive landscape of the U.S. streaming video industry, subscriber retention has become as crucial as subscriber growth, especially as the market matures and companies prioritize profitability. A recent study by research firm Ampere Analysis reveals that bundling streaming services can significantly reduce customer churn rates.
Ampere Analysis’s findings indicate that 42 percent of U.S. streaming subscribers regularly engage in a cycle of subscribing, canceling, and resubscribing. However, the research highlights that Disney subscribers who had previously churned and then returned to take the Disney+/Hulu/ESPN+ bundle are 59 percent less likely to churn within 12 months compared to those who subscribe to Disney+ alone.
In recent weeks, major players like Walt Disney/Warner Bros. Discovery (Disney+, Hulu, and Max) and Comcast (Peacock, Netflix, and Apple TV+) have announced plans to offer bundled streaming services. Ampere’s data suggests there is currently “limited overlap” in user uptake between these services, indicating significant potential for upselling and reducing churn.
According to Ampere’s first-quarter 2024 consumer data, only 15 percent of subscribers to Disney+, Hulu, or WBD’s Max subscribe to all three services within the same household. Similarly, just 10 percent of Comcast mobile, broadband, and TV customers subscribe to Peacock, Netflix, and Apple TV+ concurrently. These statistics suggest that bundling could improve user retention and encourage consumers to subscribe to additional services.
“As the SVOD market in the U.S. has become increasingly saturated, new subscribers are harder to find, which makes retention all the more important,” said Daniel Monaghan, research manager at Ampere Analysis. “There is a sizeable group of consumers who frequently subscribe to SVOD platforms, cancel and resubscribe. Reducing this behavior would boost platforms’ top and bottom lines,” enhancing both revenue and profitability.
