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Customers dropping streaming services, switching to ad-based plans

Seven of the eight largest streaming TV services in the U.S. are now offering ad-supported versions that cost less in hopes of keeping subscribers.
Customers dropping streaming services, switching to ad-based plans
Posted at 11:44 AM, Jan 03, 2024

New data provided to the Wall Street Journal indicates that a growing number of Americans are canceling some of their streaming services, while many others are selecting less expensive ad-supported plans.

According to the data provided by Antenna to the Wall Street Journal, more than 1 in 4 subscribers to major streaming services canceled at least three streaming subscriptions in the last two years. Two years ago, only 15% of customers had canceled that many subscriptions. 

There is also evidence some Americans will cancel their subscriptions only to return months later. The data found that 39% of people who canceled a streaming service in the last quarter of 2022 resumed service within 11 months. 

Customers are also seeking more ad-supported options, which generally are cheaper than subscriptions without advertisements. The data found that about 10% of Netflix customers utilized ad-based subscriptions in November 2022. That number grew to 35% in November 2023. Max saw a dramatic increase in customers using ad-support subscriptions, going from 19% in October to 58% in November.

The cost of ad-supported streaming TV is generally far cheaper for consumers. At Netflix, ad-based plans cost $6.99 monthly, whereas its standard plan costs $15.49. Max's ad-supported plan sells for $9.99 monthly, $6 less than its ad-free version. Disney+ sells its ad-supported plan for $7.99, and its ad-free subscription costs $13.99 a month. 

SEE MORE: Ads on Amazon Prime movies and TV shows will begin in late January

The shift to ad-supported plans for Netflix helped the company regain customers. Netflix had lost over 1.3 million U.S.-based subscribers before the introduction of ad-supported plans. From September 2022 through September 2023, the company has gained 4 million subscribers in the U.S.

With so many platforms offering streaming services, they're hard to keep track, said Axios media reporter Kerry Flynn. 

"And when myself and other users look at their monthly credit card bill, it's looking a little alarming with all those individual line items of those services," Flynn said. "So really there's that like price sticker shock. So we're starting to see those companies make changes to appease consumers with those changes."

In addition to ad-supported services, Flynn noted how a growing number of streaming services are offering bundling. For instance, Disney+, Hulu and ESPN can be purchased together at one price point. 

Flynn also said it's important for streamers to have great content that can't be found elsewhere to build loyalty. 

"If there's a program that I love available on one service every month, why am I going to cancel?" she said. 

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