Costing $6.99 per month, it provides cost savings of $3 per month compared to its Basic without Ads, SVOD tier. Netflix launched its AVOD service, Netflix Basic with Ads, in November 2022. Netflix AVOD has a slow start in US, despite Wednesday success Expect services that cut back on investments in their content library to face additional challenges of retention and growth, and those that don’t have a leg up on competition in the coming quarter and year. These titles demonstrate that investment into new content and licensing are still necessary to drive growth. Sports (both the NFL and Soccer), Yellowstone, and House of the Dragon were top titles driving sign up in Q4. The top growing services in Q4’22 are linked to specific titles. The industry’s focus on AVOD is a double-edged sword: it provides cost savings to streamers who may otherwise cancel a service, but it also creates a growing cohort of churners and switchers who tend to be less loyal when their repertoire becomes too big.īeyond costs, content is still key to driving new sign ups. This increase in planned cancellation is more often due to reportedly having too many subscriptions. In the latest quarter, AVOD subscriptions were 57% more likely to be cancelled in Q1’23 than SVOD subscriptions. Nearly 1 in 3 planned cancellations are now driven by wanting to save money, with another 15% driven by price increases of streaming subscriptions.ĪVOD’s impact on the expanding streaming repertoire also lends itself to boomerang behavior. With inflation being felt across categories, planned cancellation of streaming is increasingly driven by costs. Going into Q1’23, planned cancellation of US streaming is steady at 5% of subscriptions, but what is driving planned cancellation is shifting. The rise in stacking is not slowing, even with concerns of costs. US households are using 5.4 streaming services on average as of Q4’22, up from 5.2 in Q3. The acceleration of AVOD indicates streamers are looking for cost savings as they continue to grow their streaming repertoire. The FAST category, now reaching a quarter of US households, grew 3% quarter on quarter, and 35% year on year. With two new streaming services entering the AVOD space in Q4, the AVOD category grew the fastest in the quarter, up 17% quarter on quarter and 33% year on year. SVOD contracted for the second consecutive quarter, but like in Q3, categorical declines are driven primarily by Netflix. Total Streaming grew by 1 percentage point in Q4, to reach 89% of US households. Streaming is now back to growth in Q4, again with all but three streaming services growing their subscriber base. In Q3’22, the US streaming category contracted, driven by just 3 services. Planned cancellation over the next 3 months continues to be at 5% of subscriptions (NC quarter on quarter), but AVOD subscribers have the highest rate of planned cancellation, indicative of this group’s higher propensity to boomerang between streaming services.Yellowstone (purchased episodically on Prime Video or streamed on Peacock), House of the Dragon on HBO Max, and Wednesday on Netflix were the three most enjoyed titles in Q4’22. ![]() Sports events/matches drove 9% of all new streaming services in Q4, its highest impact yet. The NFL season helped drive sign up for sports content in the last quarter. ![]()
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