UK streaming
UK streaming market shows recovery but more plan to drop services
The net result of a turbulent year that also saw the launch of Wednesday, The Crown and Andor has seen UK subscription video-on-demand (SVOD) numbers rising but as many as one in 10 consumers now plan to cancel subscriptions in the first quarter of 2023 says Kantar research.
The Entertainment on Demand (EoD) study on the UK’s streaming market tracked behaviours within the VOD market between September to December 2022 and found that after a period of 12 months, when a million British households dropped out of the SVOD market, the final quarter of 2022 brought some relief, with the sector returning to growth.
Between September and December 2022, the number of VOD-enabled households that subscribed to at least one video streaming service in Great Britain rose to 16.24million, up 55,000, quarter on quarter, representing 56% of households.
The research found that the total number of video streaming services being subscribed to by British households rose by over 300,000 in the fourth quarter of 2022, with Prime Video, AppleTV+ and Paramount+ driving the major gains. Apple TV+ saw its highest-ever subscriber satisfaction score for ‘quality of the shows’, beating out Netflix and Disney.
Yet underneath this optimism was an undercurrent of what could be troubling signs ahead. While 5% of British households took out a new streaming subscription during the final quarter of the year, this represented a percentage point fall compared with the previous year.
Moreover, the proportion of consumers planning to cancel one or more SVOD services in the next quarter rose to 12% from 10% in Q3’22, indicating said Kantar that short-term holiday quarter subscribers were quickly looking to cut back.
Looking at individual content pieces driving traffic,Wednesday on Netflix was the most enjoyed SVOD title in December, followed by The Crown, The White Lotus on NOW and then Andor on Disney+. While the infamous Harry & Meghan Netflix documentary resonated with GB viewers, it struggled to penetrate US market.
In terms of products, the report noted that as part of a strategy to turnaround subscriber losses and bolster profit, Netflix launched its ad-supported tier in Britain in November 2022. The new Netflix Basic with ads tier reduced the entry price of the leading SVOD service from £6.99 to £4.99. Early data from Kantar EOD showed around 4% of existing Netflix subscribers downgraded to the new, cheaper, ad-supported tier during December, whilst just under one in five new subscribers chose the ad-supported tier.
However, the analyst also added that there was no big bump in subscriptions as a result of the launch. Even though Netflix’s ad-tier strategy was appealing to new subscribers, existing subscribers were seemingly yet to be convinced. Netflix held 7.5% share of new subscribers in Q4 2022, indicating the £2 monthly price saving is not going to be enough to drive a significant new wave of Netflix subscribers in Britain.
By contrast, Prime Video was found to have had a strong final quarter of the year, with an increasing number of households taking out Prime memberships and using the Prime delivery service in the run-up to the Christmas holidays. With an influx of subscriptions, Prime Video managed to hold its conversion rate steady, with 61% of Prime members using the service.
Disney+ was rated to have had “an exceptional” 2022 in Britain and managed to maintain its subscriber growth through Q4, albeit at a slower rate. It overtook Netflix earlier in the year in Net Promoter Score, a measure of subscriber advocacy, however, in Q4, Netflix drew level again as Disney+ suffered from a drop in this measure. Disney+ subscriber satisfaction with the number of new release films dropped to its lowest point throughout the year.
The Paramount+ service continued to draw in new subscribers in Q4 2022, achieving 7.6% share of new sign-ups in the latest quarter. This said Kantar signalled that direct-to-consumer sales are increasing, reducing Paramount+’s reliance on the Sky Cinema partnership but Discovery+ had something of the opposite challenge of Paramount+; managing to rapidly increase subscriber satisfaction levels but struggling to accelerate growth in numbers.
