26 APR 2024

UK: Netflix and Apple TV+ stay on top, while Prime Video ad-tier faces backlash

Kantar’s Entertainment on Demand (EoD) data and analysis on the UK's streaming market revealed that, while Prime Video is allegedly facing subscribers loss in response to ad-tiering, Netflix and Apple TV+ are keeping up their good results.

26 APR 2024

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Prime Video’s introduction of ads in the UK was met with significant resistance, leading to a notable subscriber exodus and dissatisfaction, according to Kantar’s latest Entertainment on Demand (EoD) data and analysis on the country's streaming market. Meanwhile, the company shared that AppleTV+ and Netflix have successfully engaged and retained their audience, with strong content offerings and stable performance metrics. These dynamics underscore the challenges and opportunities within the evolving SVOD market, where consumer preferences and responses to pricing and advertising strategies can significantly impact business performance.

Kantar explained that Prime Video is the streaming service most impacted by seasonality, often seeing a drop in Q1 following a peak in Q4 driven by Christmas period Prime membership spikes. However, Q1 this year was particularly tough. As from January 2024, Amazon introduced ads to its video streaming service, requiring existing subscribers to pay an additional £2.99/month to remain ad free. In response to this, several users canceled their subscription immediately. Key metrics, including share of new subscribers, total number of subscribers and proportion of Prime users engaging with Prime Video, fell significantly in the first quarter of 2024. The subscriber churn rate as measured in January 2024 was the highest for Prime Video measured by the Kantar study since it began in 2020.

In response to the data, Advanced Television reported that a Prime Video spokesperson said: “The findings of this research are incorrect. Prime membership continues to grow in the UK, with Q1 2024 membership up year-on-year and strong customer retention. Prime Video in the UK continues to see high customer engagement, with the number of people streaming growing year-on-year. The start of 2024 has been one of Prime Video’s strongest slates ever, with 'Fallout', 'Roadhouse', 'The Grand Tour', and titles such as 'Saltburn' and 'Reacher' from the end of 2023 continuing to acquire new customers and delight existing ones”.

On the other hand, despite significantly increased competition in the British SVOD market, one of Netflix’s strongest but least talked about superpowers, its place as the first destination consumers go to discover new content, remained as strong as ever over the year. Moreover, 52% of all British SVOD subscribers go to Netflix first when they are looking for inspiration for something new to watch, up 1% vs. the same period a year ago. Significantly, 60% of Netflix subscribers who have multiple SVOD services in their household consider it to be their most important service, +1% vs. a year ago.

“In the first quarter of 2024, we’ve seen stark contrasts in strategy and subscriber response among major players,” noted Dominic Sunnebo, Global Insights Director at Kantar Worldpanel. “Prime Video, for example, faced significant challenges as it introduced an ad-supported tier, resulting in notable subscriber churn and dissatisfaction. In contrast, AppleTV+ has successfully held onto its leadership in new subscriptions, driven by compelling content and an expanded demographic reach. Netflix continues to excel as the first port of call for British consumers seeking new and engaging content, with strong subscriber retention and growth. These trends underscore the critical importance of understanding consumer preferences and the impact of service changes on subscriber behaviour and market positioning.”

“The Gentlemen” on Netflix has proved to be a major hit for the streaming platform, as both the most watched and most enjoyed SVOD title during March. Netflix saw a strong quarter of new subscriber additions, holding 15% of all new SVOD additions in the first quarter, a +5% rise vs. the previous quarter. Netflix churn remained steady in the quarter and the lowest in the category. Customer advocacy at Netflix continues to build, and it remains in top place since overtaking Disney+ in Q3 2023.

Meanwhile, after reaching its highest ever share of new SVOD subscriptions during Q4 2023, AppleTV+ held onto top spot in the first quarter of the year with 16% of market share. "Slow Horses" and "Ted Lasso" continue to act as a strong catalyst for attracting new subscribers, whilst WW2 series "Masters of The Air" accounted for 12% of new title driven subscriptions. Almost half of AppleTV+ new subscribers joined to view a specific title in the quarter.

AppleTV+ is managing to reach a far wider audience than seen previously, with the majority of its subscriber gains seen in the 45–54-year-old age bracket, reducing its previous heavy reliance on younger audiences. Free trials continue to bolster AppleTV+ numbers, but the proportion paying for the service has risen for the last nine months. There are signs churn rates are being managed more effectively, with a decline seen every month throughout Q1 2024.