May 23, 2019

Streaming's cancel culture problem

Illustration: Lazaro Gamio/Axios

HBO's "Game of Thrones" may be over, but for lots of streaming media companies, winter is coming.

The big picture: Data shows that consumers across all ages are more than 30% likely to cancel a subscription streaming service after the show or series they are watching has ended. This creates big headaches for streaming companies over how to keep consumers from leaving, especially as the streaming space grows increasingly competitive.

Driving the news: Most critics and analysts believe that the end of HBO's fantasy hit "Game of Thrones" will not be the total end of live, appointment television, although the decline of that viewing mode is quickly intensifying. But the conclusion of "Thrones" does offer the media industry a case study of what could happen when the next big hit comes to an end.

  • A new Axios/Harris poll conducted after the "Game of Thrones" finale aired found that that 16% of HBO subscribers say they planned to cancel their subscriptions now that the show is over.

By the numbers: Most people only plan to hang onto subscription services for less than 6 months upon initially signing up, according to the most recent Video Entertainment Survey from media research firm Frank A. Magid and Associates. That number dips lower for older age groups.

  • Half of the Gen Z respondents from the survey said they intend to cancel their account after watching a specific or exclusive video at sign-up. For Millennials that number goes down to 45%, for Gen X it's 36%, and for Boomers it's only 32%.
Expand chart
Data: Frank Magid & Associates; Chart: Axios Visuals

Be smart: "Churn," or the industry term for consumers dipping in and out of subscription services, is much less likely to occur with traditional cable subscriptions, because leaving your cable company is hard.

  • Most cable companies require the return of a piece of hardware, like a cable box, and the customer service at those types of legacy companies tends to be inefficient.
  • Streaming services, on the other hand, give consumers the flexibility to sign up easily online and download and install all the necessary software without ever having to talk to a customer service agent. But it also means that they can cancel their subscriptions at any time with virtually no penalty.

What's next: Streaming services are becoming more sophisticated in leveraging marketing deals to reduce user churn.

  • Many are adding free memberships to cable and music subscriptions — subscriptions that people tend to renew annually. Hulu, for example, gives users free access with their Spotify Premium subscriptions.
  • Others are investing more in marketing shows so that they remain relevant longer. Michael Benson, the head of marketing for Amazon Studios, explained how Amazon created a real-life pop-up deli, modeled after the one featured in Amazon's hit show "The Marvelous Mrs. Maisel," to bolster the show's relevance and real-life impact.
  • "You use pieces of IP (intellectual property) to create big social cultural events. People like to join in on those types of things," he told Axios at the Collision Conference in Toronto on Wednesday.

Context: The problem isn't confined to the video streaming world. Jill Rosengard Hill, EVP at Magid Associates says younger people are less loyal to all subscription services overall, not just video.

  • * "Boxed services with easy technological sign-ups for food, clothing, etc., make it easier for consumers to dip in and out over these services. They will instead opt to have their needs met by different services in a seasonal fashion," she told Axios last year.

Bottom line: The ease with which consumers can sign up for and then cancel a streaming service subscription creates a lot of headaches for streaming companies trying to establish loyal user bases in an increasingly competitive field.

Go deeper:

Go deeper

Former Vatican treasurer George Pell's sexual abuse convictions overturned

Cardinal George Pell at the County Court in Melbourne, Australia, in 2019. Photo: Michael Dodge/Getty Images

George Pell, the former Vatican treasurer, has won his appeal and had his child sexual abuse convictions overturned by Australia's High Court.

Why it matters: The cardinal became last year the highest-ranking Catholic Church official to go to trial and be convicted for sex abuse. But the High Court's ruling means he can be immediately released from prison, where he was serving a six-year sentence.

Go deeperArrowUpdated 22 mins ago - World

U.S. coronavirus updates: Death toll tops 10,000

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

Recorded deaths from the novel coronavirus surpassed 10,000 in the U.S. on Monday, per Johns Hopkins data. More than 1,000 people in the U.S. have died of coronavirus-related conditions each day since April 1.

Why it matters: U.S. Surgeon General Jerome Adams said on Sunday this week will be "the hardest and saddest week of most Americans' lives" — calling it our "our Pearl Harbor, our 9/11 moment."

Go deeperArrowUpdated 1 hour ago - Health

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 7 p.m. ET: 1,341,907 — Total deaths: 74,476 — Total recoveries: 275,851Map.
  2. U.S.: Total confirmed cases as of 7 p.m. ET: 364,723— Total deaths: 10,781 — Total recoveries: 19,346Map.
  3. 2020 update: Wisconsin governor orders in-person primary voting delayed until June.
  4. States latest: West Coast states send ventilators to New York and other states with more immediate need — Data suggest coronavirus curve may be flattening in New York, Gov. Andrew Cuomo said.
  5. World update: U.K. Prime Minister Boris Johnson moved to intensive care as coronavirus symptoms worsen.
  6. Stocks latest: The S&P 500 closed up 7% on Monday, while the Dow rose more than 1,500 points.
  7. What should I do? Pets, moving and personal health. Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.