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Viewers Sign Up to Stream Big Events, and Then Cancel

When streaming services launch hot content, they garner new subscribers. But many new viewers exit within a few months.
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If you’re someone who signs up for streaming services to see a big movie or TV show and then cancels the service after watching it, you aren’t alone.

When streaming services launch highly-coveted content, they garner a rush of new subscribers, but many of them dump the service within a few months, according to data that subscriber-data company Antenna gave to The Wall Street Journal.

Comcast’s  (CMCSA) - Get Free Report Peacock garnered an influx of new subscribers when it was showing the Tokyo Olympics last summer. About half the U.S. viewers who signed up for Peacock at the start of the Olympics unloaded the service within four months, according to The Journal’s citation of Antenna.

Meanwhile, on the day Disney+  (DIS) - Get Free Report began showing "Hamilton: in July 2020, it gained more than 400,000 new U.S. subscribers. That was way more new U.S. subscribers than any other day since early 2020, when the service was just getting going. But more than 50% of U.S. subscribers who joined within three days of "Hamilton’s" release exited within six months, according to Antenna as cited by The Journal.

Streaming Services Lead

Retention Matters for Streaming Sevices

To be sure, even if streaming services keep only 50% of the subscribers they sign up around the time of big productions, that still means a lot of long-term customers paying regular fees, The Journal points out.

Morningstar analyst Neil Macker offered praise for Disney+ after the company’s latest earnings report in November. He acknowledged that Disney+ added just 2.1 million customers in the fiscal 2021 fourth quarter (ended Oct. 2), its lowest quarter yet, to end the year at 118 million subscribers.

“Still, the Disney+ subscriber base increased by 44.4 million in fiscal 2021, well ahead of the 18.4 million new users added at Netflix  (NFLX) - Get Free Report over the same period,” Macker wrote. “Even with the slower-than-expected subscriber growth this quarter, we still project robust long-term growth for the service.”

Peacock Has Struggled

As for Peacock, Morningstar analyst Michael Hodel offered mixed comments. “NBCU plans to double Peacock content investment to $3 billion in 2022, ramping to $5 billion annually over the next couple years,” he wrote in a commentary last week.

“We aren’t as confident that this investment will earn attractive returns, though the effort is necessary in our view.”

And why is it necessary? “NBCU needs to widen this business to hedge the declining pay television business,” Hodel said.

“But Peacock ended 2021 with only 24.5 million monthly active accounts, including 9 million paying customers, far behind rivals Netflix, HBO, and Disney. Given the content and resources at NBCU’s disposal, we believe it can catch up, but stiff competition for customers and content will likely hurt profitability over the next couple years more than we had expected.”