Facing 'subscription fatigue', customers are abandoning their streaming accounts | WARC | The Feed
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Facing 'subscription fatigue', customers are abandoning their streaming accounts
As consumers focus on tightening their wallets, subscription services are the first nonessentials to go. To appeal to these consumers, Netflix and other platforms are offering ad-driven subscription options at a reduced price.
Why it matters
As a likely recession approaches, consumers will be looking for ways to reduce spending on nonessentials and to eliminate services that go unused or unjustified. Marketers must adapt to these changing priorities and offer affordable solutions or risk losing customers.
- Nearly two-thirds of US customers report that they have cancelled or plan to cancel a subscription service in the next year, according to a recent report by consulting firm Simon -Kucher and Partners titled the Global Streaming Study.
- Consumers report that two primary strains cause “subscription fatigue”: monthly streaming bills and an excess of active subscriptions.
- A third (31%) of consumers surveyed said they found it difficult to manage and maintain all of their monthly subscriptions.
- Thirty-five percent of consumers surveyed reported cancelling a subscription to save money, while an equal percentage reported cancelling because the price was too high.
- As a result of lost subscriptions, streaming giant Netflix is rolling out lower-priced subscription options which will include ads.
- More than three quarters of adults surveyed said they would not cancel their subscriptions if Netflix were to roll out an ad-supported model.
- Twenty-one percent of those surveyed said they would expect to pay a lower price for ad-supported content.
- “It will be imperative for streaming companies to offer compelling and high-value solutions to capture a share of that digital video budget or else advertising revenues may not make up for lost subscription revenues,” said Nick Zarb, partner at Simon-Kucher & Partners.
The big idea
“Consumers are getting more conscious of how much they are spending on streaming but would rather make a trade-off for a lower priced substitute than forego the service altogether” – Ellen Kan, partner and pricing and consumer subscriptions specialist/Simon-Kucher & Partners
Sourced from Business Wire
Check out the new WARC hub, Economic slowdown and inflation: How to respond, which features the latest evidence, best practice advice and expert guidance as marketers plan for both an economic slowdown and rising prices.
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