More and more Americans are canceling their streaming services, according to a report from the Wall Street Journal.
“About one-quarter of U.S. subscribers to major streaming services … have canceled at least three of them over the past two years.” That’s up from 15 percent two years ago, “according to November data from subscription-analytics provider Antenna.”
This is happening despite streaming services like Netflix and Disney now offering lower-cost plans that include commercials.
According to this report, there are two reasons for these cancellations: budgeting and customers running out of television shows and movies to watch on a particular streaming service.
This is most interesting…
“One in four people who cancel a premium streaming service typically resubscribe to that service within four months,” the data tells us, “and one in three do so within seven months. Half do so within two years.”
What I find interesting about those numbers is how different this behavior is from cable TV. For decades, despite absurd monthly costs and non-stop price increases, Americans desperately held on to their cable packages. It wasn’t until streaming alternatives arrived that the cable TV cancellations began.
And therein lies the beauty of competition.
For decades, there was no point in canceling your cable/satellite TV. After all, your only competition was another cable or satellite service that charged about the same for the same programming. Yes, you could lock in a lower cost through a short-term deal that timed out after a few months or a year, but I think a lot of people decided that wasn’t worth the trouble that came with switching providers: returning the old equipment and be around for the installation of the new stuff. It was a hassle, and climbing on your roof to hook up a DirecTV satellite dish was beyond most people.
Streaming changed all that.
With a simple mouse click, you can easily cancel any streaming service without the hassle of equipment returns or cancellation fees. This allows you to jump from streaming service to streaming service, subscribing and unsubscribing with total ease. This means you can subscribe for a month, gobble up all the content on that streaming service you want to watch, unsubscribe, and move on to another streaming service. This is called “churn.” You could not churn through cable TV.
Cable TV was a form of socialism: there was no real competition, and everyone paid for everyone else’s content. If you didn’t watch ESPN or CNN or Fox News or MTV, it was forced on you through cable packages. This meant you subsidized dozens of networks you never watched through your monthly bill. And this is why Hollywood loves cable TV/… Loser outlets like MTV, the Disney Channel, and CNN no one watched remained financially viable by forcing cable TV customers to include (and pay for) these loser outlets on their cable packages.
Streaming changes all of that, and that’s why Hollywood hates streaming. Netflix disrupted cable TV — the greatest corporate welfare program ever created — in ways no one saw coming. People love to stream, especially young people, and now there is no going back.
By removing competition, cable TV removed merit from entertainment. Hollywood got paid whether or not you watched. Streaming requires merit. People must want your content before they will pay for it. This is a win for the consumer in the form of lower costs. Meanwhile, other than Netflix, Hollywood is losing billions on their streaming services and even more billions from cable TV cancellations.
Looming over the horizon is the threat of all these free streaming services. Pluto, RokuTV, FreeVee, and a dozen others might not deliver the most up-to-date programming, but there is an endless supply of free streaming outlets that offer a ton of free content.
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