The number of UK homes subscribing to streaming services fell for the first time in Spring 2022, according to research from TV regulator Ofcom.
The regulator’s Media Nations 2022 report says that, after years of strong growth, the number of homes using streaming services began to slow in 2021 before starting to decline this year.
As the rising cost of living puts pressure on household budgets, the number subscribing to at least one streaming service dropped by more than 350,000 to 19.2 million. SVoD services were used by 67% of all UK households in the second quarter of 2022, declining from a peak of 68% in quarter one.
Ofcom’s research chimes with figures released this year by leading streamer Netflix, which saw global subscriber numbers fall in the first and second quarters of 2022.
Ofcom said that cancellations in the UK do not necessarily represent customers that have been lost for good, and reported that almost three quarters (73%) of customers said they thought they would resubscribe.
Netflix leads the pack
Netflix remains the largest SVoD provider in the UK, with 17.1 million households (60%) subscribing, followed by Amazon Prime Video (46%) and Disney+ (23%). Sky’s Now TV is in 7% of households, and Apple TV in 6%.
Netflix and Amazon Prime Video both saw subscriber numbers fall in the second quarter of 2022 – Netflix by around 210,000 and Amazon Prime Video by around 590,000. Disney+ added around 90,000 subscribers in the same period.
Ofcom said that the number of households yet to try SVoD is becoming smaller and harder to convert, resulting in slower subscriber growth. Meanwhile, the cost-of-living crisis is making customer retention more challenging.
It concluded that less-established services such as Apple TV+, Discovery+ and Paramount+ face strong competition to be one of several services used in households that already take one or more of Netflix, Amazon Prime Video or Disney+.
On a more positive note for streamers, Ofcom found that around a fifth of UK homes now subscribe to all three of the most popular streaming platforms – Netflix, Amazon Prime Video and Disney+.
Ofcom’s research found that 5.2 million households pay around £300 per year for the three services.
A combination of price rises and increases in subscriber numbers drove strong revenue growth for the SVoD sector in 2021, with the 27% year-on-year increase, to £2.7bn, almost matching the bumper 28% growth in 2020.
Viewing habits on SVoD services suggest a strong appetite for new and original UK-produced programming. The top nine most-watched titles on Netflix were all commissioned by, or exclusively available on, the SVoD service, and half of the top ten were produced in the UK. These included the series Stay Close, After Life and Bridgerton, and the documentary The Tinder Swindler.
Age divide
The survey reported a strong usage of streaming platforms by younger audiences, who are migrating away from traditional broadcast TV.
Nine in ten 18-24-year-old adults bypass TV channels and head straight to streaming, on-demand and social video services when looking for something to watch, with Netflix the most common destination.
People aged 16-24 now spend 53 minutes in front of broadcast TV in an average day – a fall of two-thirds in the last ten years.
In contrast, those aged 65 and over still spend around a third of their waking day watching broadcast TV, sitting down for 5 hours and 50 minutes daily. This is actually slightly higher than a decade ago.
“The streaming revolution is stretching the TV generation gap, creating a stark divide in the viewing habits of younger and older people,” said Ian Macrae, Ofcom’s director of market intelligence.
“Traditional broadcasters face tough competition from online streaming platforms, which they’re partly meeting through the popularity of their own on-demand player apps, while broadcast television is still the place to go for big events that bring the nation together such as the Euro final or the jubilee celebrations.”
Broadcaster fall
Viewing figures of more than 10 million for the Women’s Euro 2022 final and the Queen’s Platinum Jubilee show that broadcast television is still a popular choice for big national events, but Ofcom’s research shows that public service broadcasters (PSBs) continue to see both audiences and levels of viewing fall.
However, there is better news for their on-demand ‘player’ apps. Overall, 82% of people said they used a PSB on-demand service in the past six months, roughly the same proportion who said they used at least one streaming service (83%). Some 59% of viewers said they used these platforms to watch channels or programmes live at the time they are broadcast.
As a result, the average time spent watching services such as BBC iPlayer, ITV Hub and All4 increased to 15 minutes per day, up by three minutes per person per day, bucking the trend of post-pandemic declines in viewing time.
BBC iPlayer has a high level of satisfaction across all age groups, with over four in five (81%) of those who had used it recently saying they were satisfied with the service.
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