Ad-supported tiers are key retention tool in maturing streaming market

Parks Associates released new findings from its report “Streaming Competition and Profitability: Pricing Models & Retention Strategies” showing that affordability overtook content availability as the leading reason consumers canceled video services.

In 2025, 30% of consumers cited cutting household expenses as the top reason for canceling a streaming service, up from 26% in 2020, according to the research firm. The findings were based on quarterly surveys of 8,000 U.S. internet households.

While exclusive content remained an important acquisition driver, it was no longer sufficient for retention.

Nearly one in four subscribers canceled a service after finishing the show they were watching, reflecting what the firm described as rotational viewing behavior in a saturated streaming market.

Ad-supported tiers emerged as the strongest retention lever. Lower-cost plans with advertising ranked as the top incentive for retaining or winning back subscribers, outpacing features such as pause options or loyalty pricing.

Advertising, however, remained a source of dissatisfaction. Seventy percent of viewers said the same ads repeated too often, making repetition the leading frustration with ad-supported streaming services.

“Consumers are no longer choosing between services; they’re choosing between price points,” said Michael Goodman, director of entertainment research at Parks Associates. “Platforms that treat affordability as a retention strategy, not a discount tactic, are far better positioned to manage churn in this mature market.”

The research also found that 91% of U.S. internet households subscribed to at least one SVOD service. The average SVOD household maintained 5.8 subscriptions in 2025, up from 5.5 in 2021, while average spend per service declined.

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More than half of new streaming subscriptions were activated through device platforms or direct-to-consumer sign-ups.

Parks Associates said the findings indicated churn was often cyclical rather than permanent, underscoring the role of flexible pricing, ad-supported options and value messaging in extending subscriber lifetimes.