PALO ALTO, Calif.—In a new report, Wurl Analytics has quantified some of the hefty costs streamers face by high churn rates, reporting that the four top SVOD services lost $80.2 million in April of 2021 alone.
The `Churn Analysis Report 2021’ found that HBO Max had the biggest losses ($33.1 million), followed by Netflix ($17.3 million), Hulu ($15.1 million) and Disney+ ($14.7 million) in April.
The report stressed that churn doesn’t just involve lost subscription revenue. It also noted that churn rates increase marketing expenses.
In the US alone, the same four services - Netflix, Disney+, Hulu and HBO Max - collectively spent nearly $50 million in media, but nearly $20 million is attributable to reducing churn, the report found.
Disney+, HBO Max and ViacomCBS experienced monthly churn rates ranging from 2% to 7%, the report also reported.
To meet their stated subscriber goals, large SVOD platforms must add hundreds of millions of subscribers just to replace those that churn, Wurl Analytics noted.
It estimates that between 2021 and 2024, Disney+ will churn 333.1 million subscribers, requiring it to attract 472.5 million subscribers in order to reach its stated growth target of between 230 million to 260 million global subscribers by the end of 2024.
For HBO Max to meet its goal of 150 million subscribers after churn, it needs to acquire 302.6 million new subscribers.
ViacomCBS's suite of SVOD services needs 210.4 million additions to hit their goals of 150 million subscribers by 2025 and 70 million subscriber additions to hit their goal of 70 million subscribers by 2024.3
"Churn is not a new problem in the video business, of course, but with the advent of streaming services, subscriber churn has escalated and accelerated due to the fact that it is much easier to cancel a streaming subscription than it is to cancel a conventional cable subscription," said Sean Doherty Jr., head of Wurl Analytics. "With this report, we are providing a snapshot of the actual financial impact churn is having on streamers. It is the first of several reports Wurl Analytics will publish each year aimed at providing the streaming TV business with valuable data insights to help inform better business and marketing decisions."
The Churn Report Analysis Report 2021 is available for download here.
George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.
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