Have we reached peak subscription? US households stop subscribing to extra streaming services

midian182

Posts: 8,041   +89
Staff member
Why it matters: Is consumers' love affair with streaming services waning? Following news that Netflix saw its user numbers decline for the first time in over a decade, a new report shows that American households have now stopped adding to their roster of streaming subscriptions after almost two years of constant growth.

Streamers such as Netflix saw their profits and user numbers explode in 2020 as people were forced to stay indoors during the global lockdowns. At one point, Netflix's market cap was higher than Disney's, though the latter is now worth more than double its streaming competitor ($88 billion vs. $210 billion).

But barring China, lockdowns are over and many people have returned to normal working life—which most aren't happy about. And that's contributed to a leveling off in the number of streaming services people subscribe to.

Bloomberg reports that a quarterly survey from research company Kantar shows the number of on-demand services accessed per household stayed at 4.7 between Q4 2021 and Q1 2022. The last time that number remained the same from one quarter to the next was between Q1 2020 and Q2 2020, when it was three per household.

We've seen Netflix's streaming crown start to slip recently. The company has lost 200,000 subs since the beginning of the year, which it blames on password sharers, increased competition, and its withdrawal from the Russian market. There was also the price hike in January that it says cost it 600,000 subscribers across the US and Canada.

The company also has to contend with rising living costs that have seen many tighten their belt. Another factor behind the falling users is its habit of canceling popular shows; Raising Dion just became the latest to join a very long list. It might have been a while ago, but this writer still hasn't forgiven Netflix for canceling Santa Clarita Diet and Altered Carbon.

Netflix, which says it is now open to ad-supported, cheaper tiers, has seen its share price fall from almost $600 at the start of the year to $198.

Also illustrating how people aren't going to subscribe to just any streaming service was Warner Bros. Discovery's announcement last week that CNN+ was shutting down just one month after launch—fewer than 10,000 people were watching it on a daily basis. Even Quibi managed to cling on to life for seven months before being put out of its misery in 2020.

"Expect to see a greater rate of churn and switching as consumers are more selective about what they watch," Kantar's report said. "It may be more challenging for newer entrants in the market, like CNN+, who will have a hard time justifying their value within the already saturated market."

One ray of hope for Netflix is the fourth season of its flagship show, Stranger Things, starts next month. In a time when it is said to be reining in spending on original content, the show reportedly cost $30 million per episode to make. But as The Mandalorian does for Disney Plus, the number of new/returning subscribers Stranger Things 4 attracts could make the cost worthwhile.

Masthead credit: CardMapr

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Dimitriid

Posts: 2,216   +4,268
Did people honestly forgot *why* Netflix got popular? It was mostly because cable tv was SO BAD people decided to just try switching to digital even if they lacked the curation, the shows and was largely unfamiliar and new.

I am surprised it has taken this long for subscription services to plateau given how fractured and expensive of a proposition is but yes: It is literally cable tv all over again.

And again, older people will eventually start settling for switching over yet again except this time to user generated content (Youtube and Twitch for now) as their primary source of entertainment. We're already there with most millennials and virtually all zoomers so it's not really going to be a huge adjustment people choose amateur content instead of paying for 3 to 5 separate subscription services to actually catch all the content they deem worthy since all of them have some compelling options but none of them have enough compelling options al on their own because of this fragmentation.
 
D

Dd663

Let me know when people start making shows as good as Avatar: The Last Airbender again, and I'll consider signing up for more streaming services.
 

terzaerian

Posts: 1,397   +2,017
Did people honestly forgot *why* Netflix got popular? It was mostly because cable tv was SO BAD people decided to just try switching to digital even if they lacked the curation, the shows and was largely unfamiliar and new.
Netflix, like Steam, got to be dominant because it was a one-stop shop. Wanted to re-watch TNG? They got you. Maybe you're more a fan of the Office? They had you to. Random B-grade horror? Scores. Netflix in the 2010s was a smorgasboard of content that managed to be both good comfort food in terms of watching as well as novel that was more than the sum of its parts.

As they say, though, all good things. Despite the fairy tale of the golden goose being hundreds of years old, the content creators decided they wanted to part the goose out and now they're paying the price. Meanwhile Netflix is letting the sinister influences on the board run the company into the ground while cancelling every good idea they ever had. Good riddance and I hope the lot of them go bankrupt.
 

NintPlayBox

Posts: 58   +55
In reality all most people need is Netflix, Hulu Prime Video.... anything else is just adding to the unnecessary expenses.
 

BadThad

Posts: 1,108   +1,304
Ever think about this? Under our current ineptocracy in the US people have LESS MONEY. Food, gas or a subscription service, pick one? It was booming up to 2020 because Trump had the economy running on all cylinders and people had disposable income. Now we're stuck with the WORST administration in history, a horrible economy and America (and the world) is falling fast.
 

dangh

Posts: 625   +980
In reality all most people need is Netflix, Hulu Prime Video.... anything else is just adding to the unnecessary expenses.
And as well not at the same time. I'm signing for Netflix for couple of months, then stopping and watching disney... there is no ned to subscribe to all of them, I can watch episoedes when I want, this is not a cable, so I can easily save money.
Netflix is a great service, but number of subscribers reaches plateau and it is time to focus on good content and keeping them there.
Best thing is - I don't have any kind of cable or air tv at home and see no reason to get one - and that's a great thing.
 

psycros

Posts: 4,260   +6,093
The greed of content creators is the main downfall of streaming. They underestimated the consumer's desire for convenience and simplicity and everyone is rejecting the Balkanization of content. Netflix adding original content works as long as there is plenty of *other* programming on their service as well. The opposite approach, as HBO, Paramount and most other studios are now taking, doesn't have a prayer. Now both camps are going to suffer as a result. Yar har har and fiddle-de-dee.
 

terzaerian

Posts: 1,397   +2,017
And as well not at the same time. I'm signing for Netflix for couple of months, then stopping and watching disney... there is no ned to subscribe to all of them, I can watch episoedes when I want, this is not a cable, so I can easily save money.
Netflix is a great service, but number of subscribers reaches plateau and it is time to focus on good content and keeping them there.
Best thing is - I don't have any kind of cable or air tv at home and see no reason to get one - and that's a great thing.
This is a miserable, miserable strategy. By the time I've dug out and input my CC details for the fifth time this year to re-up a Netflix subscription while checking my calendar to make sure I've cancelled Paramount, HBO and Disney, I could have powered up a VPN and seen what's fallen off the back of the torrent truck or gotten lucky in a thrift store or the library a dozen times over. You're just validating their balkanization while putting more stress on yourself.

Also, how does your strategy fare when they start cracking down on it the way Netflix is starting to crack down on things like account sharing? You're naive if you think they're not aware of it and mulling over ways to stop it. I imagine part of that mitigation is going to be making it so that it's less cost-effective to subscribe monthly than yearly.
 
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defaultluser

Posts: 442   +353
If I wasn't sharing with so many other people, I would just cancel services every few months

But I did cancel Starz and Showtime after I got bored with American Gods and Billions

I'm currently paying fo: Netflix, Hulu, Prime, and Disney+, all shared with tons of friends; the friends provide me with Paramount and HBO - there's no other service out there that interests me on the massive Roku channel store!!

Of course, the pandemic being officially over could also have something to do with it!
 
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Raytrace3D

Posts: 342   +420
Did people honestly forgot *why* Netflix got popular? It was mostly because cable tv was SO BAD people decided to just try switching to digital even if they lacked the curation, the shows and was largely unfamiliar and new.

I am surprised it has taken this long for subscription services to plateau given how fractured and expensive of a proposition is but yes: It is literally cable tv all over again.

And again, older people will eventually start settling for switching over yet again except this time to user generated content (Youtube and Twitch for now) as their primary source of entertainment. We're already there with most millennials and virtually all zoomers so it's not really going to be a huge adjustment people choose amateur content instead of paying for 3 to 5 separate subscription services to actually catch all the content they deem worthy since all of them have some compelling options but none of them have enough compelling options al on their own because of this fragmentation.
I never really thought about it that way, but yeah, it's totally Cable TV now. haha I remember when the term "commercial television" was a way to describe those scrubs who couldn't afford Cable and had to watch ads... now it doesn't matter, we're all watching ads and still paying for it.
 

wiyosaya

Posts: 7,845   +6,829
And now for a word from the Kingdom of Fakebelieve...
Ever think about this? Under our current ineptocracy in the US people have LESS MONEY. Food, gas or a subscription service, pick one? It was booming up to 2020 because Trump had the economy running on all cylinders and people had disposable income. Now we're stuck with the WORST administration in history, a horrible economy and America (and the world) is falling fast.
 

Guberian

Posts: 196   +259
Ever think about this? Under our current ineptocracy in the US people have LESS MONEY. Food, gas or a subscription service, pick one? It was booming up to 2020 because Trump had the economy running on all cylinders and people had disposable income. Now we're stuck with the WORST administration in history, a horrible economy and America (and the world) is falling fast.
People had disposable income because the federal reserve snorted a line and churned out more money then ever before to keep the economy afloat and his approval up before the election. Well the consequences of his actions are catching up now with record inflation and now the new administration is trying to fix the problems the arose from the lack of foresight that your "infallible" Trump Administration had.
 

wiyosaya

Posts: 7,845   +6,829
Content providers saw streaming as a fad that literally everyone wanted to get in on. IMO, they were wrong. By failing to assess, by asking subscribers, what was going on and why subscribers switched they have screwed themselves. Each service that has decided that subscribers absolutely will subscribe to their service because of the content they provide has a lesson coming.

For me, I got tired of paying $85/mo for Dish Network and its 500 channels of :poop: on the TV to chose from when I rarely watched more than 5 of those channels in total.

Now, I have what is essentially the same thing - 500 streaming services of :poop: to choose from plus 38+ channels of digital OTA - some of which, IMO, offer better original content than any of the streaming services. As I see it, the streaming services have decentralized the cable TV model without understanding that people still do not want to pay for things they rarely watch. It was a better model, IMO, when content was available on Netflix from other services like Paramount and others. I will not go back to paying exorbitant amounts of money just to occasionally watch content from another provider.

Finally, most of the streaming services release their content on disk - and typically that is better quality than anything streamed. Take Paramount and the Star Trek franchise stuff - which is released on Blu-ray. Though I have to delay gratification - OH MY - I cannot have it right away /s - my local public library is diligent about getting the popular shows literally as soon as they are available on disk - and I get to enjoy that content in better quality than I could streamed from the producing streaming service. The only notable exception to this is Disney+ - who, for some reason, obviously $$$ (or so they think) has failed to release anything on disk. Disney+ failing to release on disk has left me with the decision to wait until enough content is available then subscribe for a month, maybe two at the most, catch up, then unsubscribe. If Disney+ is going to play hardball with me, I'll bat that ball right back to them.
 

Revolution 11

Posts: 136   +174
Netflix, like Steam, got to be dominant because it was a one-stop shop. Wanted to re-watch TNG? They got you. Maybe you're more a fan of the Office? They had you to. Random B-grade horror? Scores. Netflix in the 2010s was a smorgasboard of content that managed to be both good comfort food in terms of watching as well as novel that was more than the sum of its parts.

As they say, though, all good things. Despite the fairy tale of the golden goose being hundreds of years old, the content creators decided they wanted to part the goose out and now they're paying the price. Meanwhile Netflix is letting the sinister influences on the board run the company into the ground while cancelling every good idea they ever had. Good riddance and I hope the lot of them go bankrupt.
The tragedy is that Netflix anticipated all of this back in 2015 and massively increased their content budgets. But instead of building a kickass roster of low-cost or medium-cost niche shows, foreign shows, animation, and high story-telling quality content on a reasonable budget, they blew all that money on extremely low-quality trash that no one will ever rewatch and very expensive blockbusters with brain-dead stories.

There was a way to do all this with far more bang for the buck. Too much trust in the Netflix algorithm and not enough curation of content BEFORE they are funded.
 

Dimitriid

Posts: 2,216   +4,268
I'm currently paying fo: Netflix, Hulu, Prime, and Disney+, all shared with tons of friends; the friends provide me with Paramount and HBO - there's no other service out there that interests me on the massive Roku channel store!!

Of course, the pandemic being officially over could also have something to do with it!
Just as an interesting example I think this is kind of the average for most people: you're paying for 4 services. If you have just the cheapest tier on all of those, it comes to about 35 USD per month right?

If you paid for the other 2 services you'd want but get through sharing, you'd be up to 55 or so right?

Meaning that if you or your relatives used to pay for cable tv, there's a pretty good chance you were paying about that much 10 or 15 years ago.

Once you tall all of them together, everyone really is back to paying for cable tv, except now there's a little bit more of a fine detail to be had but there's going to be lots of cracking down on password sharing and such to minimize it.
 

terzaerian

Posts: 1,397   +2,017
Though I have to delay gratification - OH MY - I cannot have it right away /s - my local public library is diligent about getting the popular shows literally as soon as they are available on disk - and I get to enjoy that content in better quality than I could streamed from the producing streaming service.
We don't often agree on much but we agree on this. Thanks for plugging your local library - it's cheap as free and the librarians aren't out to mine you for your data like you're some kind of squishy ore node.
 

wiyosaya

Posts: 7,845   +6,829
There was a way to do all this with far more bang for the buck. Too much trust in the Netflix algorithm and not enough curation of content BEFORE they are funded.
IMO, it is quite literally another iteration of seeing only what they want to see and not bothering to investigate what is really happening.
 

wiyosaya

Posts: 7,845   +6,829
We don't often agree on much but we agree on this. Thanks for plugging your local library - it's cheap as free and the librarians aren't out to mine you for your data like you're some kind of squishy ore node.
You're welcome. The library is great, and I figure my patronage of it helps to keep it going. IMO, everyone complaining about the content from service XYZ ought to check out their local library, too. My library system has literally thousands of DVD/Blu-ray/UHD Blu-ray disks available for loan. They also have some rather rare, independent offerings, too, that might be hard to find if I wanted to buy them.

One thing, but its trivial, IMO, is that if what I want to watch comes from a different branch than my local branch, I have to pay a one-time fee of $0.50 to borrow it for a week (I say one-time because I can renew online up to at least three times for a total of three-weeks of borrowing time). IMO, that sure beats Redbox, not to mention the selection of titles the library has too.

And you are right! The library does not mine the borrowing data.
 

Raytrace3D

Posts: 342   +420
Just as an interesting example I think this is kind of the average for most people: you're paying for 4 services. If you have just the cheapest tier on all of those, it comes to about 35 USD per month right?

If you paid for the other 2 services you'd want but get through sharing, you'd be up to 55 or so right?

Meaning that if you or your relatives used to pay for cable tv, there's a pretty good chance you were paying about that much 10 or 15 years ago.

Once you tall all of them together, everyone really is back to paying for cable tv, except now there's a little bit more of a fine detail to be had but there's going to be lots of cracking down on password sharing and such to minimize it.
That's true.. The total I'm paying every month for streaming is $112.44
$15.49 - Netflix
$64.99 - YouTube TV
$5.99 - Hulu
$14.99 - Amazon Prime
$2.99 - PBS App
$7.99 - Disney Plus

That's not counting the cost for internet (which I'm paying $289.99/m, 1Gb/45mb) - long story on the internet cost but I had to pay over 10K to get it installed at my house so they forced me into paying it over time.
 

BadThad

Posts: 1,108   +1,304
People had disposable income because the federal reserve snorted a line and churned out more money then ever before to keep the economy afloat and his approval up before the election. Well the consequences of his actions are catching up now with record inflation and now the new administration is trying to fix the problems the arose from the lack of foresight that your "infallible" Trump Administration had.
Oh my lord, so blame Trump for all of Biden's failings. TYPICAL! You know SQUAT about economics.
 

MarkHughes

Posts: 297   +263
I'm in the UK but me and the Mrs get all we need from Netflix and Prime only, We decided a long time ago that two was plenty and if we decide to try another we will drop one of the ones we already have.

There is already far more than we can watch and adding more services would only increase the amount of choice that already sometimes cripples us while trying to figure out what to put on.