15 APR 2024

Crackdowns on password sharing impacted on SVOD subscribers loss

A study by Horowitz Research analyzed how recent crackdowns on password sharing are impacting consumer behavior when it comes to subscription streaming services.

15 APR 2024

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Half of TV content viewers (52%) have canceled or lost access to at least one of their SVOD services within the past year, according to Horowitz Research’s “State of Media, Entertainment & Tech: Subscriptions 2024” report.

Among those who canceled or lost access within the past 12 months, the main reasons cited include efforts to cut subscription costs, recent price hikes, and perceived lack of value for the cost. Notably, for almost 3 in 10 viewers who canceled, not being able to share or borrow log-ins was a contributing factor.

The crackdowns and rising prices are having an impact on consumers’ wallets: About one third (35%) of streamers surveyed reported that they are paying more this year than they were last year for streaming services, and self-reported average spend on SVODs increased from $49.33 reported in the 2021 study to $60.60 in the 2024 edition of this report. In this context, it is not surprising that 6 in 10 streamers (59%) express receptiveness to ads if it means paying less for their subscriptions. In fact, now that Netflix has been offering a $6.99 tier with ads, almost 1 in 3 streamers in the study who have Netflix say they are on the ad-supported tier of service.

Still, almost 1 in 4 (23%) streamers plan to cancel one or more of their SVODs in the coming months, an increase from 19% who intended to churn in 2023. Among those who plan to cancel, Netflix is the service most often mentioned as being on the chopping block.

“The economics of the streaming business demand that these companies crack down on password sharing in order to continue to deliver the great content audiences want,” noted Adriana Waterston, EVP of Insights and Strategy at Horowitz. “That said, given rising costs for streaming, consumers will become more and more judicious about how they are spending their money in the streaming ecosystem. To avoid churn, subscription streaming services will need to focus on smart windowing strategies to keep audiences consistently engaged with their content and be proactive about helping consumers downgrade to lower-priced and/or ad-supported tiers as soon as they see a subscriber’s viewership and engagement dropping.”