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Even before the Liz Truss government’s disastrous mini budget, times were tough in the UK from the ongoing cost of living crisis and this has fed into the UK’s streaming industry over 2022 says research from Kantar.
Kantar VOD 18Oct2022
In the latest version of its Entertainment on Demand data on the UK’s streaming market, the insights and consulting company found that between July and September 2022, the number of video-on-demand (VOD)-enabled households that subscribed to at least one video streaming service in Great Britain fell to 16.18 million, down 234,000, quarter on quarter, representing 56% of households in the UK market.

Kantar’s data reveals that House of the Dragon on NOW was the most enjoyed streaming title on a subscription VOD service over the quarter, followed by Lord of the Rings: The Rings of Power on Prime Video. Encouragingly, the findings also indicated some degree of market stabilisation after consecutive declines in subscriptions this year. Indeed, the analysis also showed that after a sharp fall in SVOD household penetration in Q2’22, some degree of stabilisation in the market in Q3 should be seen as a positive sign, with penetration losses lower than in the previous two quarters. Continuing the improving picture is the fact that overall SVOD numbers increased in absolute terms in Q3 2022, up by 108,000 compared with Q2’22.

“There are a number of dynamics at play in the market, such as the cost of living crisis and subsequent ‘cord-cutting’, as well as a degree of ‘content fatigue’, experienced by some VoD viewers, which has resulted in an overall drop in household SVOD penetration,” said Dominic Sunnebo, global insight director, Kantar, Worldpanel Division commenting on the research.

“However, the launch of a new streaming service into the UK market has been relatively successful, suggesting that fresh content is still a key attraction for British viewers. Netflix accounted for just under one in four SVOD churners in the latest quarter, but what’s key here is that 45% of these Netflix churners dropped out of the SVOD market altogether. Data indicates that viewers did not switch to a competitor, or use a secondary streaming subscription; rather, they left the SVOD market altogether, reverting back to either pay-TV or linear TV. In fact, 38% of Netflix customers only have a Netflix streaming subscription, and these ‘solo streamers’ are making up a disproportionate number of Netflix churners.”

Offering another key indicator of the market in general, Kantar noted that it might have been expected that UK SVOD would see a bounce in penetration with Paramount+ launching in the quarter. However, it added that as many as 95% of Paramount+ subscribers were already subscribing to one or more subscription streaming services. So, whilst they contributed to the overall size of the SVOD market, the service brought in a negligible number of entirely new streaming households. In addition, subscription stacking slightly rose in the latest quarter, with the average VOD-enabled household subscribing to 2.5 different services, up from 2.4 the previous quarter.

“Off the back of its rapid growth, Paramount+ now has to work fast to ensure the strength of bond with its newly acquired subscribers,” added Sunnebo. “Current subscriber advocacy is relatively low, with just 7% of Paramount+ subscribers having multiple SVOD services ranking it as their most important service. At this early stage of launch, this is not unusual, but the critical task for Paramount+ is enabling fast discovery of their wider content catalogue beyond heavily marketed titles like Halo and Star Trek.”