British streaming market shows signs of recovery after a turbulent year

Kantar Worldpanel’s Entertainment on Demand study in Great Britain uncovers the following behaviours within the Video on Demand (VoD) market between September to December 2022:

• Between September to December 2022, the number of VoD-enabled households that subscribed to at least one video streaming service in Great Britain rose to 16.24 million, up +55k, quarter on quarter, representing 56% of households
• 5% of British households took out a new streaming subscription during the final quarter of the year, down from 6% a year earlier
• The total number of video streaming services being subscribed to by British households rose by over 300k in the quarter, with Prime Video, AppleTV+ and Paramount+ driving the major gains
• Apple TV+ saw its highest-ever subscriber satisfaction score for ‘quality of the shows’, beating out Netflix and Disney
• Wednesday on Netflix was the most enjoyed SVoD title in December, followed by The Crown, The White Lotus on NOW, and then Andor on Disney+
• Harry & Meghan’s Netflix documentary resonates with GB viewers but struggles to penetrate US market
• The proportion of consumers planning to cancel one or more SVoD services in the next quarter rose to 12% vs, indicating short-term holiday quarter subscribers are quickly looking to cut back

Prime Video drives the market back to growth off the back of rising Prime membership
After a period of 12 months, when one million British households dropped out of the SVoD market, the final quarter of 2022 brought some relief, with the sector returning to growth.

Dominic Sunnebo, Global Insight Director, Kantar, Worldpanel Division, comments, “Prime Video had a strong final quarter of the year, with an increasing number of households taking out Prime memberships and using the Prime delivery service in the run-up to the Christmas holidays. With an influx of subscriptions, Prime Video managed to hold its conversion rate steady, with 61% of Prime members using the service.”

Disney+ struggles to uphold subscriber advocacy
Disney+ has had an exceptional year in Britain and managed to maintain its subscriber growth through Q4, albeit at a slower rate. It overtook Netflix earlier in the year in Net Promoter Score, a measure of subscriber advocacy, however, in Q4, Netflix drew level again as Disney+ suffered from a drop in this measure. Disney+ subscriber satisfaction with the number of new release films dropped to its lowest point throughout the year.

Paramount+ reduces reliance on Sky due to steady subscription rise
The recently launched Paramount+ service continues to draw in new subscribers, achieving 7.6% share of new sign-ups in the latest quarter. This signals that direct-to-consumer sales are increasing, reducing

Paramount+’s reliance on the Sky Cinema partnership. The Star Trek offerings on Paramount+, as well as global hit Yellowstone, were key draws to the service. However, subscriber recommendation of the service remains low, and overall subscribers rate the quality of shows significantly below competitors.

Discovery+ has something of the opposite challenge of Paramount+; it is managing to rapidly increase subscriber satisfaction levels but struggling to accelerate growth in numbers. Discovery+ subscribers are increasingly satisfied with the amount of original content on offer as well as the quality of the shows, which has translated into a consistent drop in planned and actual cancellation of the service.

Netflix ad-tier strategy appeals to new subscribers, but existing subscribers unconvinced
Netflix launched its ad-supported tier in Britain in November, as part of a strategy to turn around subscriber losses and bolster profit at the American giant. The new tier, Netflix Basic with ads, reduced the entry price from £6.99 to £4.99. Early data from Kantar Worldpanel EoD shows around 4% of existing Netflix subscribers downgraded to the new, cheaper, ad-supported tier during December, whilst just under one in five new subscribers chose the ad-supported tier. However, there was no big bump in subscriptions as a result of the launch. Netflix held 7.5% share of new subscribers in Q4 2022, indicating the £2 monthly price saving is not going to be enough to drive a significant new wave of Netflix subscribers in Britain.

Adams Family spin-off drives Netflix engagement
Despite a muted response in Great Britain to its ad supported price plan, Netflix hit Wednesday, an Adams Family spin-off starring Jenna Ortega and Catherine Zeta-Jones, dominated the most enjoyed content during December, with 16% of all VoD subscribers citing it as their most enjoyed title. One in 10 new Netflix subscribers in December specifically cited Wednesday as their reason for signing up. This was followed by

The Crown on Netflix and Andor on Disney+. NOW sleeper hit, The White Lotus, was the 3rd most enjoyed title over the quarter. The Harry & Meghan documentary on Netflix jumped into 5th place in terms of most-enjoyed titles in December in Great Britain, in sharp contrast to the US where it was placed 95th, despite The Crown performing very strongly in the States. The Lord of the Rings: The Rings of Power continues to draw in new customers to Prime Video, with 15% of their new subscribers naming the hit show as their reason for signing up. Kantar