Amazon Prime Video Emerges as New Leader in Streaming Industry Churn Rates
Move over Netflix, there’s a new player in town when it comes to customer loyalty in the streaming industry. According to a recent study by Parks Associates, Amazon Prime Video has taken the lead with the lowest rate of customer cancellations. The study reveals that Prime Video’s annual churn rate stands at a mere 8 percent, indicating that only eight out of every 100 Prime Video members cancel their subscription within a 12-month period.
In stark contrast, Discovery+ seems to struggle in retaining subscribers, with an alarming annual churn rate of 43 percent. This significant disparity underscores the varying levels of success in customer retention among streaming platforms.
The study also sheds light on the churn rates of other major streaming services. Hulu, HBO Max, Peacock, Disney+, and Paramount+ recorded churn rates of 15 percent, 17 percent, 17 percent, 21 percent, and 24 percent, respectively, during the same period from April 1, 2023, to March 31, 2024.
Apple TV+ narrowly edged out Discovery+ with a churn rate of 40 percent. The popularity of shows like “Ted Lasso” likely led to a surge in Apple TV+ subscriptions around its Season 3 premiere, only to see a decline post-finale.
The success of Amazon Prime Video can be attributed to its unique positioning within the market. While the exact number of Prime Video subscribers remains undisclosed, a vast majority of them access the service through an Amazon Prime membership, primarily known for its expedited shipping benefits. This bundling strategy has proven effective in retaining a large subscriber base.
On the flip side, Discovery+ faces challenges in retaining subscribers, especially following the rebranding and expansion of HBO Max in spring 2023. With Max offering a comprehensive range of content, including most of Discovery+’s programming, subscribers may opt to switch for a more inclusive streaming experience.
Despite Netflix’s reputation as a streaming giant, the study reveals that its annual churn rate stands at 9 percent, slightly higher than Prime Video’s. The absence of an annual subscription option may contribute to this disparity, as Prime Video’s annual loyalty rate benefits from offering such a plan.
As the streaming landscape evolves, Netflix is making strides to bridge the gap in churn rates with Prime Video. Eric Sorensen, Director of Parks Associates’ Streaming Video Tracker, notes that Netflix’s diversified services and syndicated content have played a role in enhancing customer retention.
The study, based on a quarterly survey of 8,000 internet households tracking churn data for various services, highlights the average annual churn rate for all OTT services at 47 percent. This figure underscores the challenges faced by niche streaming platforms in retaining subscribers amidst fierce competition in the industry.
‘Ted Lasso’ Trailer: https://www.youtube.com/watch?v=Kd1mV8cLc1I
