Homes in the UK last year canceled two million streaming services as the cost of living soared Netflix

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British households cut more than two million subscriptions to services like Netflix, Prime Video and Disney+ last year, as the cost of living crisis fueled the first annual drop since the UK’s streaming revolution began a decade ago.

Despite the support from the royal family, as viewers flocked to the Harry and Meghan documentary and demand continued for episodes of The Crown, nearly 900,000 British households abandoned streaming services last year, with the total number who had at least one paid subscription dropping. From 17.12 million in 2021 to 16.24 million.

Biggest Hits in UK Subscription Streaming Services Source: Kantar Entertainment On-Demand Panel

Many of the households that are still streaming have multiple subscriptions, with an average of 2.5 services. Total video subscriptions fell by just over 2 million last year to 28.5 million..

The last quarter of last year showed signs of a modest recovery, as the traditionally bumper Christmas period added a net increase of 300,000 subscriptions.

However, the rebound may be short-lived, with evidence that some new customers were simply looking for a quick binge over the festive period.

The share of consumers planning to cancel a subscription to one or more video-on-demand services in the first three months of 2023 rose to 12%, research firm Kantar said, compared to 9.6%, “suggesting that subscribers in a quarter of short-term holidays are becoming fast.” We look forward to downsizing.”

The launch of the low-cost, ad-supported Netflix category, which the company hopes will be a $3bn (£2.4bn) annual global business, has failed to reignite growth in the UK.

The country’s most popular service had most of the big hits over the Christmas period, with 4.5 million viewers for the Duke and Duchess of Sussex’s six-part docuseries, as well as dramas The Wednesday and The Crown. Hoping to take advantage of these offers, Netflix launched Basic with Ads on November 3, targeting increasingly budget-conscious consumers who want to trade in watch ads for a cheaper monthly rate of £4.99.

While the company rebounded globally — adding 7.7 million subscribers in the fourth quarter, ahead of its forecast of 4.6 million, but still the smallest increase in the period since 2017 — it has yet to recover in the UK.

“There wasn’t a significant uptick in sign-ups as a result of the ad-supported tier launch,” said Andrew Skerratt, director of global insights at Kantar. “But Netflix overall saw subscriber numbers decline slightly, effectively a flat core quarter-over-quarter.”

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Kantar said Netflix accounted for a 7.5% share of new streaming subscriptions in the most recent quarter, ahead of only smaller companies Britbox, Discovery+ and Sky’s Now TV. He added that this suggested the £2 monthly savings on ad tier shows “wouldn’t be enough to drive a significant new wave of Netflix subscribers in Britain”.

Growth in UK subscriptions last quarter was led by Amazon Prime Video. It capitalized on its parent company’s popularity in the run-up to Christmas, when shoppers automatically got the service bundled as part of a Prime subscription, AppleTV+ and Paramount+, which is home to content like Yellowstone, Star Trek: Strange New Worlds, and Halo.

In total, there were 1.5 million new UK streaming subscriptions in the fourth quarter, and 1.2 million cancellations, resulting in overall growth of 300,000.

Over the course of the year, Disney+ added the most new subscribers of any video-on-demand service in the UK.

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