For Gen Z and Millennial Video Streamers, ‘Churn’ Is the Word

In today’s rapidly evolving video streaming landscape, consumers have an unprecedented level of autonomy to choose what to watch, when to watch it, and how to watch it. As more and more Americans cut the cord on traditional cable services and transition over, how are they navigating the wide world of video streaming? 

Perhaps one of the biggest advantages to consumers – and likewise one of the biggest challenges for many streaming providers – is the ability to just ‘pay for what you need’ on a monthly basis. 

Recent CivicScience data shows that for a large percentage of streamers, this can easily translate into high churn rates, particularly for young adult streamers. An August survey finds that among U.S. adults who use video streaming services, a total of 49% say they have subscribed to a video streaming service within the past year to watch specific content hosted on an app or site and then canceled their membership after they finished watching it.

While a slight majority (55%) of these ‘churners’ have canceled once or twice this year, the remainder – still a significant percentage – have signed up for a service and canceled three or more times. That’s a lot of churn.

As expected, churn tendency is highest among streamers under age 35. Nearly half of Gen Z respondents say they jumped from service to service to watch specific content at least three times in the past year. That’s also true for 40% of Millennial respondents. 

The shape of things looks drastically different for the over-35 crowd, where the majority of streamers report never having done this. However, it’s still noticeable among 35- to 54-year-olds, of which more than 40% have at least one incident of signing up/dropping out shortly thereafter.

It’s not surprising that this type of quick churn is highest among the lowest income earners, where younger adults exist at a greater share. The cost of continued subscriptions to multiple streaming platforms can add up, and many are taking advantage of the revolving-door opportunity to cancel at will in order to watch certain TV series or movies.

Which streaming services are most vulnerable to churn?

Ad-supported vs. Ad-free Streaming Services

Survey findings show that streamers are relatively evenly distributed among using video services that include ads and those that are ad-free. A slightly larger percentage (37%) say they are more likely to use free or low-cost services with ads (such as Hulu or Paramount+ ad-supported plans), compared to ad-free or premium services (such as Netflix or HBO Max Ad-Free). Nearly one-third of adults say they equally use a combination of ad-free and ad-supported streaming services.

Survey results suggest that churn is naturally highest among ad-free service favorables – 52% of people more likely to use ad-free services say they have subscribed to watch something in particular and then canceled at least once in the past year. Nearly 30% have done this three or more times. That could suggest that streamers prone to churn want to watch more content only available on more costly ad-free services, and/or that they want to avoid sitting through ads.

Although less prevalent, the data show that churn still occurred among nearly half of streamers who are more likely to watch low-cost ad-supported services.

Looking specifically at Netflix (still an ad-free platform at time of writing), the data show a strong correlation between people who say they used Netflix in the past but canceled and this type of churn. That suggests that the majority of Netflix users who have canceled their subscriptions weren’t intending to stick around for long to begin with. Even so, half of current subscribers and more than half of potential future subscribers say they have signed up for services and then bailed after watching specific content. 

An App Full of Content and Nothing to Watch

Another factor playing into churn is content availability and marketing. Yes, consumers have a plethora of video streaming services to choose from and access to expansive libraries of media at any given time. But for many streamers, quantity doesn’t equate to quality. Nearly 30% of streamers say they frequently have trouble finding content they want to watch. That needle hasn’t budged for nearly a year, when CivicScience last ran the survey.

And as previous findings also showed, young adults continue to be the most dissatisfied with the amount or types of content that they stream.

Putting the two together, people who signed up to watch something specific and then canceled are significantly less satisfied with streaming content. They are half as likely as non-churners to say they ‘usually always find something to watch.’ Those who do the most hopping around, however, are slightly less-often dissatisfied with content than infrequent churners, which in a way makes sense since they are getting more content variety.

So even though churn tendency has a strong financial bent, part of the consumer decision to cancel and cut costs after subscribing to watch something specific is likely also related to restlessness and dissatisfaction with content available on streaming services. For now, churn is embedded into video streaming habits, especially for demanding Gen Z and Millennial streamers.