Stream Subscription Hopping Is Here; Can Live Sports Tamp It Down?

For years and years we have documented here the trend of cord-cutting from traditional cable television services. And we all know where those previous subscribers have gone: to streaming services, particularly as those services have matured and performed better than they did in the early days.

But if cord-cutting was a thing the cable industry should have, but didn’t, recognize early enough, so too might be the problem of “subscription hopping.” Fragmentation of content across an ever-growing number of streaming platforms has forced consumers to face a new problem. Rather than expensive singular cable packages filled with channels and content subscribers largely don’t want, now the public has to decide what combination of different streaming services can be cobbled together, and paid for, in order to give them the content they desire.

As part of a post on new streaming platform bundles that are set to come out later this year — specifically a bundle for Max, Disney+, and Hulu — ArsTechnica also talked about how people are quick-canceling streaming subscriptions after binging shows.

Subscribers are quick to cancel their subscriptions to these platforms, whether to avoid these frustrations or because they’ve finished watching their favorite content on the service. According to subscription analyst company Antenna, about 25 percent (or 29 million) of US video streaming subscribers have canceled three or more of their subscription video-on-demand services in the last two years. Such subscribers reportedly represented about 40 percent of new subscriptions and cancellations in 2023, the company told The New York Times last month.

This high churn rate is a streaming business “killer,” WBD CEO David Zaslav said during an earnings call this morning, according to The Hollywood Reporter. The executive described the bundling of streaming services as “a big helper” to fighting cancellations, which WBD has been “hyper-focused on.”

Bundling might help, but now we’re right back to the problem that pushed a lot of people into cutting their cable cord to begin with, as Karl discussed this morning. Inevitably, those bundles will include a ton of content people don’t care about and they’ll be priced higher than individual services and will likely go through price-hikes after subscribers are gobbled up. It’s all starting to feel a bit like a cable television bundle, except the content is spread across different platforms and apps, the one advantage that a cable television subscription has over these bundles.

And to be clear, this is a huge problem.

The number of “serial churners,” or cost-savvy customers who hop between streaming services, is on the rise, according to new data from subscription research firm Antenna.

• Nearly 30 million subscribers canceled three or more streaming subscriptions in the last two years. These customers accounted for ~40% of all new subscriptions and cancellations in 2023.
• But that doesn’t mean they’re gone for good: A third resubscribed to the service they canceled within six months.

So, what’s the solution here for the streaming platforms? Well, the afore-mentioned bundles of platforms are one play, for sure. I don’t think it’s a particularly good play, however. A better solution is one I’ve banged on about for a long time: live sports.

As transient subscribers become the norm, streaming services are scrambling to adapt. The planned joint sports venture from Disney, Fox, and Warner Bros. Discovery seeks to emulate the success Disney has found from bundling so far. Others are turning to incentives, like Peacock. Right before hosting the NFL playoffs this year, the platform offered new subscribers a one year subscription for half price. The play was successful: The platform scored a big increase in subscribers, but its cancellation rates stayed average.

Here, though, fragmentation can, again, be a problem. Especially as leagues appear to want to spread their content across multiple streaming services. Where do you go to watch the NFL? YouTube TV. Also, Peacock. Oh, and Amazon, for Thursday night games. You get the point.

In any case, this is a problem for which the streaming services are going to have to come up with an answer, or else they will suffer the same struggles that cable television did.