According to a recent report from Kantar – a data, insights and consulting company – inflation and the cost-of-living crisis are causing households in Great Britain to de-prioritise entertainment.
Kantar reports that the number of GB households with at least one SVOD subscription fell during Q1 2022, to reach 16.9 million (58% of GB households). This represents a -215K subscriber drop quarter-on-quarter. The overall household SVOD penetration for GB’s streaming market declined for only the second time ever, according to the company.
Kantar highlights that SVOD penetration for younger households in particular has been negatively impacted by the cost-of-living crisis, with the penetration rate for Generation Z households falling for the first time ever down to 74.6% in Q1 2022. This represents a decline of 1.2 percentage points from the previous quarter, and a fall of 0.8 percentage points from Q1 2020.
The number of SVOD cancellations is also increasing for GB households, with 1.51 million customers cancelling an SVOD subscription in Q1 2022, up from 1.04 million churners in the previous quarter (and 1.2 million in Q1 2021.) Kantar reports that more than 500,000 cancellations (approximately a third of total SVOD cancellations) were attributed to ‘money saving’ by those unsubscribing. In the previous quarter, only 28% attributed the decision to cancel to money saving.
Moreover, the proportion of GB streaming service users planning to cancel SVOD services has risen “to its highest ever level” reaching 38%, up from 29% in the previous quarter. Only 3% of GB households took up a new streaming service subscription during the quarter (the lowest ever rate, according to Kantar) compared with 4.2% doing so during the same period in 2021.
Kantar commented: “It’s now more critical than ever that SVOD providers demonstrate to consumers how their services are indispensable in the home in what has become a heavily competitive market. New marketing and content acquisition strategies will likely need to be deployed to support this and avoid further churn. “
According to a survey of 2500 UK households conducted by EY Data – a data and analytics company – 27% want to cut the number of streaming services they are currently subscribed to.
Praveen Shankar, UK and Ireland Managing Partner for Technology, Media and Telecoms, EY, said: “With UK economic growth under threat as inflation rises, concerns around price rises for digital services – from broadband to streaming platforms – are pushing consumers to cut back on the digital services they use.
“It’s essential now that service providers re-frame their strategies to build long-term value for UK consumers and offer compelling propositions that are flexible and reflective of the financial pressures people are facing.”
