Young consumers are more likely to cancel a subscription-based streaming service than any other consumer age group, according to new research released Monday by Ampere Analysis.
The report found 36 percent of young consumers between the ages of 18 and 34 years old cite cost as a major factor when deciding to cancel a streaming service — but it wasn’t the only determining factor, with young consumers also citing access to content, variety of shows and films, and convenience among the other determining elements.
While streaming churn might be higher among young consumers, the demographic is also the one that has the largest number of subscription-based offerings, with an average of 4.2 streaming video subscriptions compared to the overall average of 3.3. And while churn rates among the 18-34 demographic is higher than the average, more than half of young consumers — 58 percent — said they’d re-subscribe to a service is they find the content appealing, according to Ampere.
The results were based on a consumer survey conducted during the first three months of the year, which drew 56,000 Internet participants across 30 markets, of which 21,107 were in the 18-34 group.
“The growing signs of indifference among young consumers towards subscription OTT services signals a need for platforms to rethink their position,” Isabelle Charnley, a consumer analyst at Ampere Analysis, said in a statement. “While viewers subscribe to more SVoD services than ever, loyalty is increasingly reserved for a select few. Many turn to social media for quick, frictionless content to avoid decision fatigue.”
Charnley said subscription streamers can remain relevant to young consumers by positioning themselves as “lean, cost-effective complements to premium services, with a clear and defined role in the content stack or elevate their core value proposition to justify a higher price point.”
In other words, it isn’t just enough to be present in the market: Subscription services can retain young streamers with attractive pricing and content to boot.
Many are already transforming their services under this line of thinking: While premium subscription offerings continue to raise prices, most — including Netflix, Disney Plus, Paramount Plus and Max — have lower-priced tiers that offer much of the same content, subsidized by short ad breaks during content.
Prime Video, the Amazon-owned streaming platform and one of the world’s biggest, moved all streamers to its ad-supported tier by default, rather than raising the price of its base offering. (Most Prime Video streamers watch content through a Prime membership, which unlocks other perks like two-day shipping, cloud photo storage and streaming music.) Those who want uninterrupted streaming of on-demand Prime Video content can pay an extra $3 per month for the privilege.
“Players must deliver deeper, more consistent value through engaging content, flexible access, and a compelling user experience that keeps audiences coming back,” Charnley said.
