Churn cost the top subscription streaming services--HBO Max, Netflix, Hulu and Disney Plus, a combined $80.2 million in April, according to Wurl Analytics.
Wurl’s Churn Analysis Report 2021 said that HBO Max lost $33.1 million, Netflix lost $17.3 million, Hulu lost $15.1 million and Disney Plus lost $14.7 million.
The big services had churn rates of between 2% to 7%, according to Wurl. Netflix was lowest at 2%. The newer services, Discovery Plus and ViacomCBS' Paramount Plus were at the high end with 7%.
Churn is bad news for streaming services for at least two reasons. The first is that the services have to spend extra marketing dollars in order to attract new customers to replace those signing off.
Wurl notes that Netflix, Disney Plus, Hulu and HBO Max, collectively spent $50 million on misdeal and attributed $20 million of that to reducing churn.
Churn also makes it harder for streaming services to reach the subscriber goals they’ve promised to Wall Street.
For example, Wurl estimates that between 2021 and 2024 Disney Plus will churn 333.1 million subscribers, which means in news to attract 472.5 million customers to reach its growth target of 230-260 million by the end of 2024.
Similarly, for HBO Max to get to 150 million subscribers, it needs to get 302.6 million new subscribers to sign up, Wurl said.
“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.”
