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Streaming: Consumers cancel subscriptions to multiple platforms amid rising costs

Yahoo Finance reporter Allie Canal explains why more customers are canceling their streaming subscriptions as costs rise and more competitors enter the mix.

Video transcript

[MUSIC PLAYING]

- Streamers are having a hard time holding on to subscribers as more consumers cancel their subscriptions to save a few extra bucks. Yahoo Finance's Allie Canal has the latest on this for us. And Allie, there certainly are so many to choose from these days. People find themselves paying just too much for some of their streaming services.

ALLIE CANAL: Yeah. You know what, Seana? I don't really think we should be surprised by this. This was a trend that we were seeing even prior to all of the increased competition. But we have some new data now to actually back all of this up.

According to subscriber measurement firm Antenna, about 19% of subscribers to premium services canceled three or more subscriptions in the two years leading up to June. Now, that's compared to just 6% in the two-year period leading up to June 2020. We're talking about the big platforms here-- Netflix, Hulu, Apple TV+, HBO Max.

Despite all of that content, consumers are getting a little bit more choosy. As you were mentioning, it's becoming a lot more expensive to subscribe to all these different platforms. And they want to be a little bit more frugal with their money. In fact, if you combine all the top platforms and select the ad-free version, you're spending around 90 bucks.

So streaming is not the cheapest game in town anymore. And that's why it's so important to have that high-quality content. And it's also why we're seeing a lot of these platforms look for other ways to expand their customer base.

Walmart, for example, is reportedly partnering with Paramount Global to bundle that service into their Walmart+ membership program. We've seen other platforms, like Netflix and Disney, partner with wireless providers, like Verizon, for that same exact reason. So it's all about making your platform as sticky as possible, especially since in today's world it's so easy to just jump from platform to platform.

- Yeah, Allie, what are the other strategies? I mean, we've seen "Ted Lasso," for example, spread out episodes over the course of several weeks instead of dumping them at once. Are we going to see more do that? And the other thing I've always wondered about, do any of these streamers incentivize customers staying and retaining their membership over the course of a year?

ALLIE CANAL: Yeah, and I think that's a really great point, Dave. I think we've seen some experimentation with just not bingeing TV all at once. That was a Netflix model that worked really well. But now we've seen HBO, Apple, some other platforms experiment with just releasing maybe three episodes at once, waiting a week, and then doing it week by week. Others are still dumping them all out. So I think there's still a lot of experimentation going on in the landscape right now.

I also think it's interesting to see how some of these big tech giants are trying to be a Roku in a sense. We've heard from YouTube they're reportedly planning to launch an online store for streaming services. So you can subscribe to YouTube TV and then select your platforms a-la-carte and add that on the subscription. So to me that's just a way to threaten the status quo right now.

I know a few people that subscribe to YouTube TV and love it. So with this online store, potentially that could be a threat. And again, it's all about creating that stickiness. I think that's the key word in the streaming wars right now.

- I just want to follow up on that YouTube plan. So how does that work? If I'm a consumer and I can go to YouTube and that is my gateway, if you will, to all the other streamers, how does that work?

ALLIE CANAL: So they're going to have to partner with individual platforms. And then they'll share some of that revenue, right? So it's sort of this win-win scenario where these platforms are on that YouTube TV marketplace. So they're able to access consumers in an additional way. And then YouTube gets a cut of that revenue.

So apparently this has been in the works for about 18 months, YouTube taking it pretty seriously. We could see this be an offer by this fall. And I just think it's interesting to see how the streaming wars have evolved, because it sort of feels like we're going back to a bundled cable package in some ways. But then again, with so many services out there, maybe that's what consumers need right now, just a centralized, streamlined platform. I don't know what you guys think about it, but there's certainly a lot to chew on right now with the landscape.

- Yeah, YouTube also gets a boatload of consumer data with that, a lot of more people pouring into their platforms and then going elsewhere, whereas that is probably an interesting side angle to that. But yeah, your point is a good one, that it does feel like everything we tried and wanted to get away from in cable TV we are sort of now getting right back into with the streaming marketplace, aren't we, in terms of cost, in terms of options, in terms of bundles?

ALLIE CANAL: Yeah, I certainly think so. And I think that's why we're going to see a lot more consolidation in the streaming wars. Already we're starting to see that, with Warner Brothers, Discovery. They're combining Discovery+ with HBO Max to be one service.

And perhaps later on we'll see the bigger guys gobble up the smaller guys, because I do think you're going to reach a certain point where there's just too many platforms, too much content, and too much money. And we're already seeing consumers jump around to the different platforms. So I think it's going to be interesting to see who really survives at the end of the day and what partnerships that we'll see moving forward, because I think that's a big question mark right now.

- Yeah, these stories all go hand in hand, don't they, because really, the more they drive up the prices and bundle things together, it forces people to be nimble and to move around, because we don't want these massive bills every month like we had with cable TV. Good stuff. Allie Canal, thanks for coming on.