Netflix: free riders will dismount rather than give free rein to streamers
Signing up to multiple streaming services used to be so tempting. The free trials appealed to us. We rushed through a deluge of new and exciting content, for example hamilton on Disney+, The crown on Netflix and Flea bag on Amazon Prime.
Once payments kick in, each of the three services could be had for the same price as a movie ticket, or less. Basic monthly subscriptions for the trio – including free parcel deliveries for Amazon Prime users – are still just £23 ($30) in the UK and $33 in the US.
Streaming evangelists envision a world where every household subscribes to multiple services. The cost of living crisis challenges their assumption. The public, looking for the sofa to find change in these difficult times, is peeling off. Around 1.5 million video on demand accounts were taken down in the UK in the first three months of the year, analyst group Kantar estimates. Netflix expects to lose 2 million subscribers, or 1% of its total customer base, in the current quarter. The CNN+ streamer has bailed out.
The savings are still only a fraction of those crystallized by “cord-cutting” Americans canceling cable television services. In the UK, the BBC’s license fee of £159 for terrestrial TV use would easily cover the cost of using any streaming service.
But as Netflix’s latest figures show, many viewers would rather forgo their monthly subscription than a pint of beer or a few lattes. Although the basic costs are low, most Netflix subscribers opt for the intermediate package. Last month it broke the psychological threshold of £10 to £10.99.
Free riders, one for every two paying subscribers by Netflix calculations, circumvent this by sharing passwords. Others rely on VPNs and Google to find shows online, often illegally.
Big video streamers are hoping to squeeze out pirates like music giant Spotify has done. Amazon this week renamed its ad-supported site Freevee. Disney+ plans to launch its ad-supported subscription model in the US later this year. Netflix, in an about-face, is drawing up similar plans.
Wise. Older people are often late adopters. But in streaming, young people can turn out to be non-adopters. Many happily watch streaming services on their parents’ tab when they’re not glued to YouTube or TikTok. They may decide they can do without Netflix when their own name is on the bills. The BBC offers a clue: last year there were almost a million fewer licenses in force than two years ago. Turns out, it’s remarkably easy to disconnect.
The Lex team wants to know more about readers. Please let us know if you’re cutting back on your streaming subscriptions in the comments section below.