Streaming services have had considerable success in leveraging high-profile movie and TV releases to attract new viewers to their platforms. The problem is that many of these new subscribers are fickle, and wind up canceling within a few months.
“Churn” is the term used for the rate at which users unsubscribe from a streaming platform. The audience measurement company Antenna analyzed the churn for Disney+ and HBO Max in the period leading up to and following high-profile premieres such as HAMILTON and WONDER WOMAN 1984. The data show a jump in new subscriptions leading up to a new release, followed by over half of those signups canceling their subscription within six months.
Streamers have no choice other than to spend lavishly on premium new content for their platforms. Some financial analysts are questioning the consequences of this “all-in” approach, resulting in a significant drop in share prices for most streaming stocks over the past month.