Streaming services were pioneered by Netflix in 2007, with Hulu launching publicly in 2008. It took until November 2019 for both Disney+ and Apple TV+ to launch.
Streaming Service Customers
Today, each streaming service has millions of customers:
- Hulu has 48.5 million paying subscribers
- Netflix has 247.1 million subscribers
- Disney+ has 150.2 million subscribers
- Apple TV+ is estimated to have 42 million viewers in the United States
- Amazon Prime Video is estimated to have over 200 million subscribers worldwide (fueled by Amazon Prime subscriptions)
Latest Churn Numbers for Streamers
Churn rates for streaming services have been on the rise since the beginning of 2022 and they've reached new heights this year. Here's why:
- Prices are rising as streamers struggle to reach profitability
- There's more original content than ever
- Content is spread across multiple streaming services, making the monthly price as much as cable TV used to be
The Netflix Password-Sharing Saga
One factor that drove a spike in churn rate for Netflix was a crackdown on password sharing in the summer of 2023.
While Netflix claimed that this was a necessary measure to safeguard the platform's integrity, it did result in a minor uptick in churn. Subscribers who had been sharing passwords with friends and family were now required to have their individual accounts. Consequently, some chose to cancel their subscriptions, contributing to the overall increase in churn rates.
And yet, despite an initial increase in churn, Netflix experienced a whopping 70% quarter-over-quarter revenue increase. In the third quarter of 2023, they raked in $8.54 billion, compared to $7.93 billion in the same quarter last year.
This showcases the company's remarkable pricing power. The password-sharing crackdown and price adjustments were part of the company's efforts to enhance profitability and grapple with rising production costs.
Apple TV+ Price Hike
Apple TV+ faced a noteworthy surge in churn, with its churn rate climbing from 5.5% in July 2022 to 6.4% in July 2023.
This increase can be largely attributed to a daring decision by Apple: a substantial 40% price hike in their monthly subscription service. Additionally, the expiration of a yearlong free subscription offer—which was available when the service was initially launched—played a role in this shift.
Apple TV+'s strategy differs from the competition: where other streaming services have large libraries of content and/or focus on producing a high volume of shows and movies, Apple invests in what it perceives to be higher-value content.
That means that Apple TV+ may discourage some viewers since it has a smaller back catalog. This, in turn, may contribute to a higher churn rate.
Disney+: The Retention Champion
While many streaming platforms are struggling to retain their subscribers, Disney+ has proven to be a consistent standout performer in terms of retention.
Their secret weapon? A compelling bundle package that includes Disney+, Hulu, and ESPN+ at an attractive price point. By offering a diverse range of content across these platforms, Disney+ has managed to keep its churn rate in check.
Furthermore, Disney+ has maintained an impressive subscriber retention rate by strategically launching highly-anticipated movies and series every few months. These high-profile releases create a buzz, draw in new subscribers, and keep existing ones engaged. Disney's ability to balance content quality, quantity, and variety has made them a leader in subscriber retention.
That concludes our breakdown of the top video subscription services! Hopefully, you've gained some new insights from this overview. With numerous major players in the streaming industry, it's intriguing to observe how each one compares to giants like Netflix and Disney+.
It's hard to parse the performance of some platforms like Apple TV+, but we've done our best to source as much data as possible.