Streaming’s bundling obsession ignores the real problem with subscription costs
Video streaming providers have a big churn problem. While many streaming companies are not profitable yet, the entire industry is grappling with high and fast cancellation rates.
Users who sign up for streaming services only to cancel a few months later, likely because they watched what they wanted to already or are trying to save money, has created huge churn concerns for streaming companies. Those companies are largely responding with packages that bundle their services with other services, including rival streaming platforms. But with streaming subscribers already pushed to their financial limits, it’s time for streaming providers to earn their keep, not piggyback on others.
This week, media research firm Hub Entertainment Research published its 2024 Monetization of Video report with findings from June interviews of 1,600 TV viewers ages 16 to 74. The respondents reportedly each watch at least one hour of TV weekly, and the sample is “US census balanced,” per Hub. When Hub asked respondents if they will “still have/use” their video streaming services a year from now, 85 percent of those using ad-free services said they definitely or probably will, compared to 74 percent of subscribers of streaming services with ads. Further suggesting that ad-free subscription tiers garner more loyalty, 15 percent of ad-free subscribers said they “might/might not” or “probably/definitely won’t” have their subscription next year versus 26 percent of ad subscribers.
