Consumers slash TV streaming subscriptions as price sensitivity peaks

With life seeming to get ever-more expensive, how many consumers are reconsidering their subscriptions to TV streaming services? Our latest research finds more than a third of Americans and Brits have cut the number subscriptions they have in the last 12 months – while  cheaper ad-supported plans are becoming increasingly attractive. 

The survey of 1,200 nationally representative working-age consumers in the US and UK shows that viewers are downgrading plans faster than they’re upgrading, while the biggest streamers face the highest risk of cancelation.

Quick summary

• More than a third of consumers have reduced the number of TV streaming subscriptions they have in the last 12 months, and now typically have 2-3.
• 40% of Americans and 38% of Brits have downgraded a premium plan to an ad-supported one.
• Nearly a third of subscribers in both markets have upgraded to a premium subscription in the last 12 months.
• 26% of US consumers and 29% of UK consumers plan to cancel or downgrade a subscription over the next year. 
• Price sensitivity is high with more than half of subscribers ready to cancel or downgrade if prices rise by more than 20%.

US results

Americans have already undertaken a TV streaming subscription cull

Nearly 40% of US consumers say they have canceled a subscription to a TV streaming service in the last 12 months, with Netflix and Disney+ having sustained the highest rates of cancelation (around 10% of respondents said they had canceled). 

Today, the single largest percentages of Americans have either two (20%) or three (21%) TV streaming subscriptions, with the most popular services being Netflix (70.5%), Amazon Prime Video (56%) and Hulu (49%) [view US results dashboard]. 

However, looking at the figures overall, 63% of the 18-30 and 31-49 age groups, and 49% of over 50s, have at least three subscriptions. The 31-49 age group shows the highest rate of multiple TV streaming subscriptions: 16% have more than five, compared with 10% of their younger and older counterparts. 

The over 50s are the demographic most likely to not subscribe to any TV streaming services (17%) or have just one subscription (16%). They’re also most likely to have ad-supported plans: 76% versus only 35% who have a premium ad-free plan. This preference for ad-supported subscriptions is not seen among the other age groups. 

Significant amount of TV subscription plans have been downgraded

For consumers who don’t want to cancel a subscription but need to economize, many services offer the option to downgrade to a cheaper plan supported by ads. Just over 40% of Americans say they have switched from a premium plan to one with ads in the last 12 months.   

Netflix sees the highest rate of plan downgrades (18%), while 13% have switched to an ad-supported plan with Hulu, and with Amazon Prime. Consumers aged 31-49 are most likely to have downgraded a premium plan in the last 12 months (46%).  

Meanwhile, upgrades to ad-free plans have failed to outpace downgrades, with only 32% of consumers going premium in the same period. Just over 14% of respondents said they upgraded their Netflix subscription, while 9% had upgraded across Hulu, Amazon Prime and Disney+. 

Looking ahead, fewer consumers are considering canceling or downgrading a TV streaming subscription in the next 12 months: 26% say they’re likely to. Those aged 31-49 have the highest intent, with 31% thinking about it. Looking at the risk of cancelation/downgrade per streaming service, there’s a 6-8% churn forecast for the top providers. 

Moderate price increases could jeopardize subscriber numbers

US consumers remain fairly price sensitive, with 56% saying they would cancel or downgrade a TV streaming subscription if the price rose by more than 20%. On the flip side, there is a dedicated 25% of viewers who would accept a 30-40% price increase before reconsidering their options.

Ad-supported plans become attractive when they’re priced at
30-40% less than premium plans

For streaming services that want to incentivize people to choose ad-supported plans, our data shows they start to become attractive when they’re priced at 30-40% less than premium plans (29% of viewers would switch for that level of saving). Even at a 10% discount, 18% of subscribers would be tempted. And it’s not only those on a lower income looking to make savings: 48% of those with a household income over $100k would opt for an ad-supported plan if it was between 10-40% cheaper. 

However, there is a limit to the number of ads viewers are willing to tolerate in exchange for cheaper streaming. The sweet spot is three to four ads per show before viewers get irritated and start to think about canceling or upgrading. 

UK results

UK consumers are subscribing to fewer TV streaming services

Subscription trends among UK consumers reveal that over a third (34%) have terminated a TV streaming service in the past year. Netflix and Disney+ experienced the highest cancellation rates, with around 8% of survey participants reporting ending their subscriptions.

Currently, the majority of British consumers maintain either two (29%) or three (25.5%) TV streaming subscriptions. The most popular platforms are Netflix (81%), Amazon Prime Video (67%), and Disney+ (51%) [view UK results dashboard].

Younger demographics are more inclined towards multiple subscriptions. Notably, 61% of 18-30-year-olds, 41% of 31-49-year-olds, and 34% of those over 50 have at least three streaming services. Gender also influences subscription habits, with 52% of women holding at least three subscriptions compared to 40% of men.

The 50+ age group is most likely to abstain from TV streaming services entirely (19%) or to have just a single subscription (22%). This demographic also exhibits a strong preference for ad-supported plans (75%) over premium ad-free plans (29%), a trend not observed in younger age brackets.

Downgrading is a popular way to manage TV subscription costs

Amid economic pressures, a significant 38% of British consumers have opted to switch from premium to ad-supported TV subscription plans in the past year, rather than cancel outright. Netflix leads in downgrades at 20%, followed by Amazon Prime and Disney+, each at around 10%. The 18-30 age group shows the highest tendency to downgrade premium plans, with nearly half (46%) making the switch in the last 12 months.

Conversely, only 32% of consumers upgraded to ad-free premium plans within the same period, failing to surpass the downgrade rate. Netflix saw a 15% upgrade rate, while both Amazon Prime and Disney+ experienced approximately 10%.

Future plans indicate a slight decrease in potential subscription changes, as 29% of consumers are considering cancelling or downgrading TV streaming services in the coming year. Those aged 18-30 and 31-49 show the strongest inclination to make these changes, with 30% from each segment considering it. Expected churn rates for top streaming providers are forecasted at 7-9%.

Price hikes mean potential subscriber losses 

Price sensitivity is prominent among British viewers in the TV streaming market, with over half (55%) ready to cancel or downgrade subscriptions if operators put prices up by more than 20%. However, a notable 28% demonstrates higher price tolerance, willing to accept increases of 30-40% before reassessing.

Ad-supported plans become attractive when they’re priced at
30-40% less than premium plans

Ad-supported plans become appealing when priced 30-40% lower than premium options, prompting 32% of viewers to switch. Even a 10% discount can entice 16% of subscribers. This isn’t solely driven by lower-income individuals; 44% of households earning over £75k would opt for ad-supported plans with a 10-40% price reduction.

A key factor influencing viewer tolerance for ad-supported models is the number of ads. Acceptance peaks at up to four ads per show, beyond which irritation sets in, leading viewers to consider canceling or upgrading.