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What is "Churn"? In streaming, "churn rates" refer to the number of consumers dropping streaming subscriptions. While churn rates were relatively low during the early days of streaming adoption -- when services were very differentiated and there were only a few major options available -- increased competition in the streaming space has caused a significant jump over the last few years. Why it matters? Initially, streaming platforms were focused almost exclusively on adding subscribers as their sole metric for success. But with studios and media companies transitioning their goals from growth to profitability, churn rates are being more heavily scrutinized than ever. With competition intensifying in the future -- particularly as platforms continue to consolidate, like HBO Max and Discovery+ -- a major goal for streamers will be to minimize churn rate and maintain subscriber levels. Where to see the impact? Of particular note in this chart is that streaming bundles tend to perform better, and demonstrate lower churn rates, than their standalone counterparts. Disney's bundle of Hulu, Disney+ and ESPN+ didn't see a churn rate above 4% since January 2020, while ESPN+ alone hit a 9% churn rate at the start of this year. As well, the chart only includes introductory figures for the Paramount+ with Showtime bundle, but it's initial churn rate started out lower than either Paramount+ or Showtime on their own. |
