Antenna’s annual report on SVOD, “State of the Subscriptions,” indicates that the streaming video industry is transitioning into a new phase after focusing on subscriber growth in previous years. The report shows that the number of SVOD subscriptions has more than doubled in the past four years, with a particular emphasis on managing their existing subscriber base moving forward.
At the end of 2023, there were a total of 242.9 million SVOD subscriptions, with significant growth seen in platforms such as Netflix, Peacock, and Paramount+. However, the year-over-year increase in subscriptions was only 10.1%, a drop from previous years. Netflix continues to dominate with a 26% market share, down from 48% in 2019.
One noticeable trend is the increase in churn within the SVOD industry. With a growing number of streaming options available, the churn rate has tripled over the past four years. In 2023, there were 164.7 million new SVOD sign-ups and 140.5 million cancellations, resulting in a net gain of 24.2 million new subscribers – a significant drop from previous years.
Antenna’s research found that the longer a subscriber remains with an SVOD service, the less likely they are to cancel. Churn rates are double among new subscribers compared to long-term subscribers, with users with over four years of subscription having churn rates five times lower than first-year subscribers. Moreover, 41% of customers who have cancelled an SVOD service ended up returning within a year.
In response, SVOD providers are urged to shift their focus from subscriber growth to customer lifetime value (CLV) to retain subscribers. By focusing on metrics such as tenure, depth, diversity, frequency, and devices used, providers can better understand their customer base and improve value. Strategies like tiering, launching new products, hosting live events, and promoting loyalty plans can also help in building product loyalty and subscriber retention.
Industry experts emphasize the importance of understanding consumer behavior, adapting to evolving trends, and offering value-added services to maintain profitability in the rapidly changing SVOD landscape. With increasing competition and consumer demands, providers will need to innovate and personalize their offerings to cater to diverse subscriber needs and minimize churn rates.
