SVOD to grow in the UK despite onset of cost-of-living crisis

Reporting on the most up-to-date research at this week’s Connected TV Summit, Omdia Senior Director Maria Rua Aguete said: “The number of people paying for video services in the UK has increased 11% over the last year and quarter on quarter since April 2021.” According to Aguete, despite the UK cost of living crisis, people from the UK tend to spend more and certainly no less on streaming video services. In terms of dealing with rising costs, consumers prefer to cut other expenses than their own entertainment at home; as the survey reveals, cuts in additional spending have allowed them to subscribe to extra services.

Currently, the average UK household has 2.6 pay subscription services at home, 2 SVOD services, and 0.6 Pay TV services. Despite Netflix results showing a decline in global subscriptions (200,000 in Q1 2022), Netflix remains the UK’s favorite video service. It is also still the most popular SVOD service in the domestic market, the USA. The most popular services in the UK currently are:

- Netflix: 15.5 million subscriptions
 -Amazon Prime Video: 10 million subscriptions
 -Disney Plus: 7.5 million subscriptions

Churn has increased significantly in the last 12 months, with 45% more subscription video services canceled in the last 12 months. Overall, 20% more consumers canceled their services than last year. Counteracting this trend, the number of services canceled and resubscribed in the last 12 months has grown by 84%, meaning that although more people are churning, more people are subsequently resubscribing. The biggest growth in the last six months comes from:

- Disney: 21%
- NOW TV: 18%
- Netflix: 8%
- Amazon: 5%

Those with four streaming video services per home churning less than those who took more than seven SVOD services are among the highest churners. Looking forward, Omdia expects that Netflix, currently in the lead in the streaming video race (Q1 2022), will still lead in five years (2026) “With the lowest churn rate across all streaming video services and highest lifetime value per customer, Netflix will continue and surpass Disney by 2026,” Aguete added.