More and more people are jumping on board the streaming service ship, but what’s behind this transition and where are they going?
Wall Street Journal reporter Sarah Clouse joins WTOP to discuss why streaming subscription prices are declining
More and more people are jumping on board the streaming service boat. About a quarter of streaming service subscribers have canceled at least three subscriptions in the past two years, according to November figures released by subscription analytics provider Antenna.
So what’s behind the shift away from services like Apple TV+, Hulu, Max, and Netflix? And where are they going?
The Wall Street Journal’s Los Angeles bureau chief Sarah Kroes also joined WTOP’s Sean Anderson and Anne Kramer to explain what’s behind the exodus.
Sarah Claus: Streaming consumers have reached a point where they are seeing their bills go up and up as streamers try to raise prices to improve their own profitability. And households are saying, “Wait a minute, we’re paying a lot of money for these streaming services, almost what we paid in the old cable days. Which one can we live without? Which one would you only pay for if your favorite hit show is on?”
What’s actually happening is that consumers are getting very smart about turning these services on and off as hit shows come and go.
Sean Anderson: Now, of course, there’s been a lot of discussion over the last few years about cutting the strings here. Will these people return to cable TV?
Sarah Claus: Not necessarily, and certainly not in large numbers.
Cable continues to decline structurally, and the appeal of streaming over cable is the ease of cancellation. Canceling my cable bill was a pain because I had to make a phone call. Streaming can be turned on and off.
Streaming prices are still much cheaper on a net basis. So we won’t see a huge return to cable.
But what you’re seeing is, “During the streaming boom, the prices for each of these services were so low that having a bunch of different services felt like a good deal, and it wasn’t a big deal. There was a time when I felt like I wasn’t.”
But now that the prices for all of them and the sheer number of services available have gone up, it’s time to be more thoughtful about what you actually spend your money on.
Ann Kramer: As a consumer, it seems very complicated because, like Sean said earlier, you want to cut the cord. But you can’t do that because streaming services require internet and you don’t want to pay that much for streaming services. So how do you know if you really need this?
Sarah Claus: Streamers currently offer several different mechanisms to simplify distribution, reduce the number of choices, and appeal to customers with lower prices. One is the ad-supported service tier.
So some consumers think, “Okay, if I’m willing to watch ads, I can pay less for the ad-supported tier. That way I can keep the service, but at a lower price.” There is.
Other streamers often partner with rivals on bundles with their respective ad tiers. This allows the consumer to get the value of his two services at a discounted price than paying for each separately.
So if you don’t want to give up completely, but can tolerate some ads, or want to take advantage of a bundle that’s available at a lower cost, you have a few different options.
There are various ways streamers are exploring ways to win back customers faster. That’s because data shows that many streaming customers who cancel their service return later.
My story included a statistic that 39% of subscribers who canceled a major streamer in the last quarter of 2022 returned within 11 months. That means they’ll be back. But streamers are thinking, “How can we get to those people faster?”