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New on demand research shows struggle for Netflix in UK

Kantar's UK entertainment on demand study shows promising signs for ITVX and AppleTV+, while Netflix experiences a gradual decline across all areas, including content satisfaction

Marketing data and analytics company Kantar has released its latest entertainment on demand (EoD) data on the UK streaming market. 

The study monitors behaviours within the video on demand (VoD) market between January to March 2023, and found that VoD-enabled households that subscribed to at least one video streaming service in the UK fell to 16.1 million, down 144,000 quarter on quarter, representing 55% of households, compared to 16.91million in Q1 2022, and 16.95million in Q1 2021.

The total number of video streaming services being subscribed to by British households fell by 167,000 in the quarter to 29.44million, with Netflix seeing the largest absolute losses in subscriber numbers.

It also found that 4% of British households took out at least one new streaming subscription in the first quarter of the year (up from 3% a year earlier), while 7% of households cancelled at least one subscription as part of their post-Christmas ‘subscription cull’.

It reports that the second quarter of the year looks to be more stable, with planned video cancellations dropping to 6.8% of subscription holders, a fall both year on year and quarter on quarter.

The report finds that the main reasons behind subscription cancellations is to save money, particularly with Netflix subscribers although the streamer’s cheaper ad-supported offering did help to mitigate some of that drop-off.

“There has been no dramatic drop across most of Netflix’s key performance metrics, but rather, a gradual decline across almost all areas, including satisfaction with variety of TV series, amount of original content and quality of shows,” sand Dominic Sunnebo, global insight director, Kantar, Worldpanel Division. “Perhaps the most concerning area is that Netflix subscriber net satisfaction in value for money fell from +31% a year ago to +22% in the first quarter of 2023. Netflix consumers are increasingly questioning the value for money they get from their subscriptions and when consumer finances remain tight, this is translating into increased churn.”

Interestingly, Amazon’s outlook remained largely flat in a dwindling market, with its Prime Delivery offering and successful investment in original content and, importantly, sports, for Prime Video proving valuable retention assets. “The overall effect was a relatively flat Prime Video subscriber numbers, in a falling market,” continued Sunnebo. “The release of Clarkson’s Farm during the quarter played a key role in engaging Prime Video subscribers, with the title the #2 most enjoyed across all SVoD platforms during Q1’23. Amazon’s investment in Sport also played an important role, with sporting content driving one out of every three new subscribers to Prime Video in the quarter.”

ITVX noted a jump in weekly users in Q1’23 vs ITVHub in Q4’22, along with ITVX premium gaining 5% of new SVoD subscribers in the quarter with the incorporation of BritBox content. Meanwhile, AppleTV+ had a strong first quarter to 2023, seeing the second fastest growth in absolute subscriber numbers vs. the previous quarter, beaten only by the newly launched ITVX premium.