Subscription Britain hits pause button as purses tighten

netflix2The surge of subscription services in the UK could be about to crash into a brick wall, with new research showing a total of 1.51 million services were ditched in the first three months of 2022 as the cost of living crisis strikes.

The study by Kantar reveals more than half a million cancellations were made to save money, with households cutting back as inflation and soaring energy prices play havoc with consumers’ finances.

Subscription services were one of the biggest winners from the Covid-19 pandemic, with one analysis by Whistl claiming 82% of UK households now receive subscription box services, up from 65% in the previous year.

But researchers said the proportion of consumers planning to cancel subscriptions stating the primary reason as “wanting to save money” had risen to its highest ever level at 38%, up from 29% in final three months of 2021.

Kantar said households were “starting to seriously prioritise where and how their disposable income is spent” in a move that the firm branded “sobering”.

Kantar’s Worldpanel global insight director Dominic Sunnebo said: “The evidence from these findings suggests that British households are now proactively looking for ways to save.”

Kantar added that although “churn” rates increased almost across all streaming platforms, there was a “clear difference” in the number of cancellations seen outside of Netflix and Amazon.

“Netflix and Amazon can be seen to be hygiene subscriptions for Brits; the last to go when households are forced to prioritise spend,” Kantar said. “Disney, Now TV, Discovery+ and BritBox all saw significant jumps in churn rates quarter-on-quarter.”

The first three months of 2022 have also seen the lowest ever rate of new subscribers; in January, Netflix said it added 18.2 million members last year – roughly half the number who subscribed in 2020.

The company admitted that new competition from the likes of Disney, Apple, Amazon and HBO was starting to have an impact.

Kantar said advertising was an obvious route for driving revenue growth, but one Netflix has historically strictly shied away from.

It added: “Data across Great Britain shows Netflix subscribers’ attitudes to advertising are softening, with 44% now stating they don’t mind seeing on streaming services if it makes them cheaper, a significant rise from 38% at the same point in 2021.”

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