When consumers cut back on billed services, PYMNTS data shows, streaming is first to go.
Streaming subscription services face an uphill battle with churn. Netflix, for instance, is looking at cancellations ahead as it cracks down on password sharing.
“There will be current members that are unhappy with this move,” Chief Operating Officer Greg Peters told analysts on an earnings call last week. “We’ll see a bit of a cancel reaction to that. We think of this as similar to what we see when we raise prices. We get some increased churn associated with that for a period of time.”
Yet, other streaming services maintain that they do not need to worry much about cancellations, even when they increase the cost consumers pay for the service. For instance, on Disney’s most recent earnings call, then-CEO Bob Chapek insisted that this was not an issue.
“Our history shows that when we’ve taken price increases across our streaming businesses, that we don’t meaningfully increase churn or cancellations,” Chapek said.
The company did not share specific statistics related to churn rates.
By the Numbers
Research from PYMNTS’ new study “The One-Stop Bill Pay Playbook: Drivers of Consumers’ Bill Payment Priorities,” a collaboration with Mastercard, found that when consumers are unable to pay all their bills, streaming subscriptions are the first thing they cancel. The majority (55%) of respondents stated that they would cancel streaming subscriptions if they needed to reduce the bills they received each month, a greater share than said the same of any other service.
Moreover, only 17% of those surveyed stated that they would prioritize paying their streaming subscription bills in full over other bills, a smaller share than said the same of any other service.