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Rising Cost of Living forces VoD companies to re-think Business Models

Back in July, Kantar’s Entertainment on Demand Q2 data reported half a million Brits had left the streaming market, with the decline being driven by households with under 24s. They also reported the number of consumers planning to cancel SVoD services and stating the primary reason as ‘wanting to save money’ was significantly higher than 2021.

Consultancy.uk this week reported that having seen almost constant growth in subscribers, Netflix has lost over 1,000,000 subscribers in the first half of 2022 – seeing share prices collapse by over 65% in the past 12 months.

Furthermore, new research from quantilope reveals that more than one-quarter of British consumers are considering cutting their SVOD subscriptions in the next three months in their efforts to save money.

According to the latest study by Simon Kucher and Partners, companies need to re-evaluate their business models, in order to strengthen their bottom-lines without driving away more subscribers. Simon-Kucher suggests that for the likes of businesses such as Netflix, the best way to do this might be to accept advertising on their platforms.

Whilst we may have always known that not all consumers would  keep all of the subscription services they signed up for during the pandemic, this trend seems to be accelerating due to economic pressures many are experiencing. As consumers continue to feel the effects of a rising cost of living and look to cut out non essential costs where they can – and the market continues to be oversaturated – rethinking VOD business models could help to ease the strain felt by some platforms. Whilst introducing advertising is an option, there’s a need for experimentation in the types of services used to attract viewers. SVOD is also not the only option. However, it’s vital that the right tools are chosen to support the flexibility and control that are needed in the workflow to succeed.

Products aimed at providing flexibility in business models, experimenting with FAST channels, as well as AVOD and premium SVOD services such as Movida and WON allow this success to be achieved.

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