Cost and Content: Factors fueling streaming service cancellations, notes DirecTV survey

According to a recent market survey by DirecTV Advertising, nearly one in four U.S. adults canceled a streaming video service within the past three months. The main reason, cited by 35% of respondents, was a lack of adequate use of the service to justify the cost.

This new data adds another layer to the shifting landscape of consumer video consumption patterns recently highlighted by Hub Entertainment Research’s annual “Monetization of Video” report.

Consumers have reached ‘peak TV’ with focus shifting to value

Other prominent reasons for dropping a streaming service include the need to reduce entertainment expenses, price hikes by the streaming service, a lack of fresh content and finishing the specific show that prompted them to subscribe in the first place.

In the face of these cancellations, the study – conducted by market research platform Suzy – found that virtual Multichannel Video Programming Distributors (MVPDs) like DirecTV Stream see more frequent use than Subscription Video On Demand (SVOD) platforms. The report shows that in May, viewers aged 25-54 spent twice as much time with DirecTV’s streaming services each week compared to Netflix.

Those who canceled a service indicated they might consider re-subscribing if the service reduced its price, offered a promotion, or added desired programming. The results suggest that the decision to continue or cancel a subscription is heavily influenced by the amount of time spent on the service, a factor DirecTV says plays a critical role, especially for those who access streaming services via promotional offers or free trials.

DirecTV’s survey lands amid separate research from Hub Entertainment Research, which suggested earlier this year that consumers are reaching their saturation point for the number of streaming services they are willing to pay for. The Hub report found that “subscription stacking,” or subscribing to multiple services, declined for the first time in five years, falling to an average of 6.4 subscriptions.

This downturn in subscription stacking, which previously witnessed robust growth as viewers doubled their number of TV sources from 3.7 to 7.4 between 2019 and 2022, aligns with DirecTV’s findings and raises further questions about the sustainability of the current video streaming market model.

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Ultimately, the future of the industry may hinge on providers’ ability to balance their pricing structures and content offerings, both in terms of volume and appeal, to retain consumers. DirecTV’s survey and Hub’s report together highlight the need for services to adapt swiftly to evolving viewer preferences and market trends while reminding the industry that the key to long-term success may lie in finding ways to offer the most value to consumers.