Streaming Growth Slows in 2023, But Return Subscribers Offer Hope

Streaming service subscriptions faced a challenging year in 2023, experiencing a significant slowdown in growth and the highest number of cancellations in five years, according to a report from Antenna Research. Despite this, there is a silver lining, as many customers who canceled their subscriptions ended up returning to the services later.

The report reveals that total subscriptions to all streaming services, including popular platforms like Netflix, Hulu, Paramount+, and HBO Max, reached 242.9 million in 2023, adding a total of 164.7 million subscribers throughout the year. However, this growth represents a 50% decrease compared to the previous year, marking the slowest growth rate (10.1%) since before the pandemic began.

One of the most concerning aspects of 2023 was the staggering number of cancellations, which reached 140.5 million—the largest drop in subscribers over the last five years. This figure represents an increase of over 36 million cancellations compared to 2022.

Despite these challenges, the report highlights an interesting trend: a significant number of subscribers who cancel their accounts end up re-subscribing. Approximately 25% of customers who canceled their subscriptions were “won back” within three months, and 40% eventually re-subscribed within the year. In total, re-subscribers accounted for 30% of the 242.9 million new subscribers.

Apple TV+ emerged as the leader in re-subscribe rates, with 37.2% of customers returning to the service later in the year. In contrast, Netflix’s re-subscribe rate dropped to only 26%.

The industry’s lackluster performance in 2023 may signal a broader slowdown in growth for services that experienced explosive popularity during the pandemic. The launch of new platforms like Apple TV+ in 2019, Peacock in 2020, Discovery+ in 2021, and the rebranding of Paramount+ from CBS All Access in the same year has led to a shift in subscriber share. Netflix, which once held 48% of all streaming service subscriptions in 2019, now only accounts for 26%. Similarly, Hulu’s share has decreased from 23% to about 14%.

Despite these challenges, the industry added a net total of 24.2 million subscribers in 2023 after accounting for cancellations. While this is the worst performance the industry has seen since at least 2019, it indicates that there is still growth potential.

One surprising finding from the report is that about 39% of streaming service customers have only held their accounts for less than a year. This figure increases to 45% when Netflix is excluded. Furthermore, approximately 51% of these customers have only been subscribed for three months, suggesting that they are more likely to cancel their subscriptions.

In conclusion, while the streaming service industry faced challenges in 2023, including a significant slowdown in growth and a high number of cancellations, there are signs of resilience. Many customers who canceled their subscriptions ended up returning, indicating that there is still loyalty and interest in these services. However, providers will need to innovate and adapt to meet the evolving needs and preferences of their subscribers in order to sustain growth in the future.