UK homes cancelled 2 million streaming services last year as cost of living soared

British households cut more than 2m subscriptions to services such as Netflix, Prime Video and Disney+ last year, as the cost of living crisis fuelled the first annual decline since the UK streaming revolution began a decade ago.

Despite a boost from the royal family, with viewers flocking to the Harry & Meghan documentary and enduring demand for episodes of The Crown, almost 900,000 UK households gave up on the streaming services last year, as the total number having at least one paid-for subscription fell from 17.12m in 2021 to 16.24m.

Many households that still stream have multiple subscriptions, with an average of 2.5 services. The total number of video subscriptions fell by just over 2m last year to 28.5m..

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

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

The research firm Kantar said the proportion of consumers planning to cancel one or more subscription video-on-demand services in the first three months of 2023 had risen to 12%, up from 9.6%, “indicating short-term holiday quarter subscribers are quickly looking to cut back”.

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

The country’s most popular service had most of the big hits of the Christmas period, with 4.5 million viewers for the Duke and Duchess of Sussex’s six-part docuseries, plus dramas Wednesday and The Crown. Hoping to capitalise on those shows, Netflix launched its Basic with Ads service on 3 November, aimed at increasingly budget-conscious consumers willing to trade viewing adverts for a cheaper £4.99 monthly price.

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

“There was no big bump in subscriptions as a result of the launch of the ad-supported tier,” said Andrew Skerratt, global insight director at Kantar. “But overall Netflix saw subscriber numbers drop slightly, effectively a flat base quarter on quarter.”

Kantar said Netflix took a 7.5% share of new streaming subscriptions in the final quarter, ahead of only minnows Britbox, Discovery+ and Sky’s Now TV. This indicated that the £2 monthly saving on the ad-tier offers was “not going to be enough to drive a significant new wave of Netflix subscribers in Britain”, it added.

The growth in UK subscriptions in the final quarter was led by Amazon’s Prime Video. It benefited from the popularity of its parent company in the run-up to Christmas, with shoppers automatically getting the service bundled as part of a Prime subscription, AppleTV+ and Paramount+, which are home to content such as Yellowstone, Star Trek: Strange New Worlds and Halo.

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

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