As the cost of living issue strikes streaming businesses, nearly 600,000 British households canceled their Amazon (NASDAQ:AMZN) Prime subscriptions before a price increase.
Ofcom on Amazon
Ofcom, which keeps tabs on the media business, reports that the number of UK Prime subscribers dropped by 590,000 (or 5%) in the second quarter of 2022. In July, Amazon (NASDAQ:AMZN) stated that its monthly cost would increase by £1, to £8.99.
As consumers cut down on spending to combat rising inflation, Netflix (NASDAQ:NFLX) saw its membership count drop by 1%, or 210,000 people, to 17.1 million in the second quarter.
The Star Wars maker, Disney, defied the industry trend and added 1.8 million users, bringing its total to 6.6 million, a 38% gain, making it the largest streaming service in the world.
The total number of homes with a subscription to at least one streaming service decreased by 350,000, according to Ofcom’s Media Nations report.
The media watchdog noted that some subscribers who left during the downturn may return once economic conditions improve.
The authority stressed that cancellations do not always indicate permanently lost clients. Almost three quarters of customers said they anticipated they would resubscribe, according to a poll conducted by Ofcom earlier this year. This flexibility allows users to pick and reject subscriptions depending on changes in programs, needs, or circumstances.
Even though some analysts argue streaming services have become a need households cannot do without, the data casts doubt on how resilient they are to economic downturns.
Due to a lack of serious rivals in the UK market, Sky is one of the few entertainment corporations that has weathered previous economic downturns.
With the advent of the streaming revolution, however, users now have the option of downgrading to a more affordable provider like Netflix (NASDAQ:NFLX), and the system is beginning to show signs of stress.
To combat macro economic issues across Europe, Sky revealed earlier this year that its customer count had dropped by 255,000 to 2.7m in the three months leading up to June.
The number of people paying for Sky’s streaming service NOW fell by 220,000 during the second quarter, bringing the total number of paying customers to 2.1 million, according to research by Ofcom.
Disney (NYSE:DIS) is one of the few companies that has seen growth despite the global streaming slowdown; the Star Wars prequel series Obi Wan Kenobi and the Predator revival Prey have been huge hits with audiences.
For the quarter ended July 2, the world’s largest entertainment corporation, Disney (NYSE:DIS), attracted 14.4 million subscribers to its streaming service Disney+ (NYSE:DIS), bringing the total number of subscribers around the world to 221.
It has surpassed Netflix (NASDAQ:NFLX), which has been losing users and has 220.7 million total subscribers worldwide.
Disney (NYSE:DIS), Netflix (NASDAQ:NFLX), and Amazon (NASDAQ:AMZN) Prime have all introduced ad-funded solutions to keep members happy, making it possible to watch shows for less money or even for free.
Ofcom also reported that over the previous decade, the number of young people watching broadcast TV has decreased by two-thirds due to the rise of streaming services.
Featured Image: Megapixl © Mikemareen
