New Content material Is King for Streaming Platforms, However Subscribers Might Not Keep

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The Race For New Content

Data shows the release of new and exclusive TV shows or films can bring streaming platforms a rush of new subscribers. This happened for Disney+ (DIS) when it released Hamilton, Apple TV+ (AAPL) as Greyhound came out, and with AT&T’s (T) HBO Max release of Wonder Woman 1984. Analysts say the trend illustrates intense competition to constantly produce new and hotly anticipated content.

Industry observers note subscribers expect at least two major theatrical productions every few months. There’s also the need to continue building up the streaming platform’s library with older shows and movies. While all industry leaders are under pressure to keep spending with these goals in mind, they also can’t count on subscriber loyalty as many new sign-ups cancel six months later.

Keeping the Newest Subscribers Is Perhaps a Losing Battle for Streaming

Streaming services, much like the cable companies that preceded them, frequently sign up and lose customers in the normal course of business. Still, the data shows customers who sign up specifically based on the release of one show tend to leave more frequently. Comcast’s (CMCSA) Peacock streaming service illustrated this trend during the Summer Olympics, when it lost around half of those new subscribers four months later.

Analysts explain that the structure of streaming services adds to the difficulty in keeping customers. Many offer monthly subscriptions, providing just enough time to binge-watch a particular show of interest. Similarly, there are now so many options to choose from including relative newcomers like HBO Max, Disney+, Peacock, Apple TV+, and Discovery + (DISCA).

Streaming Market’s Rising Competition Affecting Industry Leaders

Streaming platforms experience spikes in new subscriber numbers for reasons other than new content releases, such as Hulu, which typically offers steep Black Friday discounts that drive new signups. The fourth season of its most popular show, The Handmaid’s Tale, was also released over the course of a few months, making binge-watching more difficult. Some analysts note streaming platforms have tried that elsewhere, such as Apple with Ted Lasso and HBO with Succession.

The growing competition makes for a crowded streaming marketplace, as data shows the typical American household subscribes to 3.6 streaming services. Industry leader Netflix (NFLX) has seen its new subscriber numbers level off in recent quarters. Industry data is sometimes misleading or incomplete as well, as Amazon Prime Video (AMZN) is part of the ecommerce giant’s broader services that include video streaming.

Overall, while the intense push for content is clear, the even bigger challenge may lie in encouraging subscribers to stick around.

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