Deloitte highlights SVOD challenges around subscription sharing and churn

New UK-based research from Deloitte estimates that 35% of people with access to a subscription-video-on-demand (SVOD) service are sharing at least one of their subscriptions with other households. Worryingly for platforms seeking to crack down on this situation, more than half (57%) of respondents who share a paid SVOD service say they would stop using the service if subscription sharing was banned.

Paul Lee, partner and global head of technology, media and telecommunications research at Deloitte, commented: “Since the birth of SVOD, the sharing of user IDs and passwords with other households has been widespread. As SVOD providers look to implement tighter guidelines around sharing to boost subscriber numbers and revenues, consumers are being faced with the choice of paying more, moving to lower-cost ‘with-ads’ packages, or foregoing their access altogether.”

Paul Lee

Lee added: “Restrictions on sharing may well lead to a growth in subscribers and higher revenues. However, it may also reduce the total number of people viewing a show or film, reducing the degree of buzz around that content, in turn diminishing the overall appeal of a service. Word of mouth recommendations – in person or online – have long been key to SVOD’s popularity. That said, some sharers who state that they would go without if subscription sharing was banned may ultimately decide to pay for access, so as not to miss out on the latest series of their favourite show.”

Interestingly, Deloitte noted that subscription sharing “has become more formalised, with a quarter of users (25%) sharing the cost of an SVOD platform they use with other households. This is most prolific among younger users.”

The Deloitte research also looked into churn, with 21% of consumers saying they have cancelled an SVOD service in the last year, with cost-of-living a key driver.

Overall, Deloitte found that access to SVOD in the UK has fallen by 1% to 73% in 2023, having peaked at 76% in 2021. The fall in access was steepest among 65-75 years olds whose usage of SVOD had surged during lockdown periods.

More encouragingly, the number of subs per person is still rising, up from 2.46 in 2022 to 2.62 in 2023, an increase of 6.5%. However, this is much slower relative to 2018-2021, when the number of subs per respondent rose 60%, from 1.45 to 2.33.

Lee said: “Churn continues to be a significant challenge for SVOD providers at a time when there is growing pressure for services to become profitable, mostly via the lever of increasing subscription prices. In order to reduce levels of churn, we may see more SVOD platforms teaming up with other media, telecoms, or financial providers to offer bundled deals; securing new and existing users in longer-term contracts.”