Antenna: Domestic 2023 SVOD Sub Growth Dropped 50%, While Churn Tripled

Growth of premium SVOD subscription tiers dropped more than 50% to 10.1% in 2023 from 21.6% growth in 2022, according to new data from Antenna. Last year saw 19.3 million more gross subscriber additions and 36.2 million more cancelations than in 2022, which translated to 17 million fewer net subscriber additions.

Antenna found that total SVOD subscriptions in the United States approached 243 million at the end of 2023. Peacock, Paramount+ (both up 1%), and Netflix drove the most of the sub growth, while Netflix held its market share (26%) for the first time since 2019.

With continued subscriber growth comes increased churn, or subs that don’t renew on a monthly basis. The data suggests that the churn rate has tripled over the past four years to 5.5%. Peacock saw the greatest improvement in churn and Starz saw the greatest increase. Netflix maintained it’s industry-low churn rate at just below 2%.

However, subscribers dropping service do come back to the same or similar SVOD platform — underscoring the consumer appeal of month-to-month access compared with long-term contracts, according to Antenna. Indeed, nearly a quarter of canceled accounts return to the service within three months, and more than 40% within 12 months. About 30% of SVOD gross sub additions in 2023 were returning subscribers, meaning these users had canceled service within the prior 12-month period.

Apple TV+ saw the highest instance of returning subs at 37.2%. The returning Netflix rate fell from 35.2% to 26%, driven by the password crackdown, which led to many first-time sign-ups by individuals who had previously used the service for free (password sharing) through another person’s account.

Peacock and Netflix saw the greatest number of returning subscribers, with 30% of cancelations resubscribing by within 90 days. After a year, 50% of Peacock and 46% of Netflix canceled subscribers had returned to the respective services.

About 39% of SVOD subscriptions are in their first year, with the percentage rising to 45% when excluding Netflix. More than 51% of the 95 million first-year SVOD subscribers are in the first 90 days of the service — the period of highest possible churn. The probability of canceling service drops from 9% in the first 12 months to 4% in the second year.

Antenna: Niche Streaming Services Spur SVOD Market Growth

While Netflix and other top subscription streaming video services drive growth through expanding global distribution, the domestic SVOD market subscriber growth is being driven by smaller, niche services catering to specific streamers, according to new data from Antenna. 

Specialty SVOD services such as AMC+, BET+, MGM+, Acorn TV and Britbox have quietly expanded at a combined 37% growth rate for the past four years, significantly higher than Netflix and other big streaming service’s 21% growth, according to Antenna. At the end of 2019, the research firm counted 10 million subscriptions to niche SVOD services, or 7% of the premium plus specialty SVOD market total. By June 2023, that number had grown to 28 million, or 11% of the total.

Antenna currently tracks 25 different niche SVOD services, and the largest, AMC+, accounts for just 11% of the category’s subscriptions. BET+, MGM+ and Britbox are the next largest players. MGM+ was the only service that Antenna observed to grow by more than 1 million net sub adds in the past year. BET+, Crunchyroll, and AMC+ were the next largest sub growth services.

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While niche SVOD services experience subscriber growth, the proliferation of services has led consumers to manage their over-the-top video portfolio more tenaciously, Antenna notes. As a result, niche streaming platforms have experienced subscriber churn similar to what Antenna observed for premium SVOD services. The firm tallied 6.6 million cancelations in the second quarter, ended June 30, up 65% from the previous year and upwards of 130% from the same period two years ago — during the pandemic. Gross subscriber additions were up over the same period, including 6.8 million in Q2, which represents a 26% uptick year-over-year and a 45% spike from 2021.

Antenna: Netflix Added 2.8 Million Gross Subs in July

Netflix’s move to launch a lower-priced ad-supported subscription streaming option and eliminate free password sharing apparently continues to produce dividends on the subscriber number front.

New data from research firm Antenna suggests the streamer added 2.6 million gross subscribers in July. Netflix added 5.89 million net subs in the second quarter, including 3.5 million in June, to end the fiscal period with more than 238 million subs worldwide.

For the second month in a row Netflix led the SVOD category with nearly one in five premium SVOD gross sub adds, according to Antenna. The streamer earlier this year cancelled its $9.99 basic subscription plan for all new and returning subscribers.

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The research firm reports it gleans the Netflix data from online purchase receipts, credit, debit and banking data for demographic and behavioral skews.

Specifically, about 23% of Netflix sign-ups went to its $6.99 monthly ad-supported plan, up 4% compared to June 2023 — the highest portion of sign-ups since the launch of that plan in November 2022. Netflix charges subscribers sharing their account password an additional $7.99 monthly.

Netflix no longer provides quarterly subscriber growth projections.



Report: Netflix Posts Big Gain in Sign-Ups Post Password-Sharing Crackdown

Since alerting subscribers in the United States that it would begin to curb password sharing on May 23, Netflix has had the four single largest days of U.S. user acquisition in the four-and-a-half years that Antenna has been measuring the streaming service, according to the research firm.

Netflix saw nearly 100,000 daily sign-ups on both May 26 and May 27, according to the Antenna report.

Average daily sign-ups to Netflix reached 73,000 during that period, a 102% increase from the prior 60-day average. The jumps exceed the spikes in sign-ups Antenna observed during the initial U.S. Covid-19 lockdowns in March and April 2020, the research firm reported.

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Cancels also increased during this period, but not as much as sign-ups, according to Antenna. The ratio of sign-ups to cancels since May 23 is up 25.6% compared to the previous 60-day period. 

These insights are the result of Antenna’s new Acquisition Drivers product which provides clients with more frequent and rapid delivery of daily sign-ups for subscription services.

Study: Ad-Supported Disney+ Off to Faster Start Than Netflix, HBO Max, Peacock

With major subscription streaming video services feverishly rolling out ad-supported tiers to jumpstart revenue, new data from Antenna finds that three months into the launch of an ad-supported option on Disney+, the platform is off to a faster start than Netflix or HBO Max among new subscribers.

The research firm found that in the first month, 20% of new SVOD subscribers went to the Disney+ ad-supported plan, compared with 9% for Netflix’s ad-supported tier and 14% for HBO Max’s. By the third month, Disney+ reached 36% penetration among new subs, compared with 19% for Netflix and 21% for Max.

Notably, Netflix’s ad-supported plan is available only with the Netflix basic plan. The streaming pioneer’s standard and premium tiers don’t offer an ad-supported option. Indeed, 54% of all new basic plan subscribers in January opted for the ad-supported tier.

The launch of the Disney+ ad tier was packaged with a significant price increase. Existing subs had the option to pay an additional $3 monthly, pay the same price with advertising, or cancel. Antenna found that 94% of Disney+ premium plan subs took the price increase, 5% canceled, and less than 1% of existing subscribers maintained their current cost by switching to the ad-supported plan.

“Consumers are clearly demonstrating that they are willing to choose advertising in exchange for a lower price,” read the report. “In Peacock’s case, three out of four subscribers have the ad-supported plan, but across the board all services that have launched ad-tiers are seeing consumers opt-in to their less expensive AVOD plans.”

Still, the growth of ad-supported subscribers takes time, the report noted. Antenna found that HBO Max’s ad-supported plan saw incremental increases among both new and existing subs following its launch, and that it now accounts for 20% of all Max Subscribers.

“Disney+ and Netflix are also seeing similar incremental increases in the first months in market — Disney+ a bit faster than HBO Max, and Netflix a bit slower — suggesting that both Services are headed towards accumulating meaningful audiences for advertising,” read the report. “While it’s still early days for ad-supported premium SVOD, it’s interesting to see multiple services experimenting with different offerings and pricing strategies, suggesting that there may be multiple paths towards profitability for video streaming services to take.”

Data: Netflix’s Ad-Supported Plan Off to Slow Start

When Netflix launched its lower-priced ad-supported subscription plan Nov. 3, co-CEO Reed Hastings cautioned the impact would be minor from the get-go with little impact through the fourth quarter, which ends Dec. 31.

Indeed, data from Antenna suggests a modest start for the $6.99 monthly plan. The research finds that 9% of Netflix’s domestic subscription sign-ups in November were to the “Basic With Ads” plan, making it the least-popular of their plan options. In addition, just 0.1% of Netflix’s existing U.S. subscribers switched to the ad-supported option.

The results mimic consumer response to HBO Max, which saw a mild pickup when it first launched its ad-supported option in June 2021. As Antenna previously reported, 15% of HBO’s U.S. sign-ups were for HBO Max with ads in its launch month.

In addition, Antenna found that 0.2% of existing U.S. Max subs switched to the ad-supported plan in its launch month, about double the Netflix switching rate.

The popularity of the Max With Ads plan did increase over time, accounting for as many as nearly 33% of new subs over the course of its first year in the market. Currently, Antenna estimates that 21% of Max subs use the ad-supported plan.

“Consumers have demonstrated that, with the right pricing and packaging, they will opt-in to ad-supported video services,” Antenna wrote. “In fact, services that launched from day one with an ad-supported tier (or, in Hulu’s case, launched ad-free, but introduced an ad-supported option thereafter) have much higher share of subs selecting the ad-supported option.”

Jason Helfstein, analyst with Oppenheimer, said the early data suggests that Netflix, which refused to stream ads until a rocky Q1 fiscal quarter changed its mindset overnight, is easing in ads to content slowly.

“Not surprising that the ad launch has some hiccups and Netflix does not want to flood ads to  meet commitments at expense of engagement,” Helfstein wrote in a note. “Advertisers are also shifting non-holiday specific unspent funds to Q1. Microsoft is likely paying minimum guarantees; therefore, we don’t see an impact to revenue in the short term.”

Antenna: Q3 SVOD Subscriber Churn Reached 32 Million

Subscriber churn, or streaming video customers who do not renew their monthly membership, has always been a nuisance for SVOD platforms big and small. Now, new data from Antenna finds that subscriber churn in the third quarter (ended Sept. 30) ballooned to 32 million across the top 10 streaming services combined. That’s up from 28 million in each of the previous two quarters.

Antenna reported that the average monthly churn rate among SVODs reached 5.8% in September, up from 4.5% in 2021; 4% in 2020, and 3.2% in 2019.

Among the top SVOD services, Netflix realized the highest percent of increased churn. Antenna previously documented a meaningful uptick in Netflix churn following its last price increase in January 2022. In fact, Netflix’s average monthly churn was up to 3.5% in Q3 from 3.4% in Q2, and 2% in 2021.

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But when compared with other SVODs, Netflix’s churn is actually much smaller, underscoring the premise that streaming behemoth’s appeal to a broader subscribing customer remains strong.