Nearly 600,000 British families canceled their Amazon Prime subscriptions ahead of a price hike as the cost-of-living crisis hits streaming companies.
The number of UK Prime customers dropped by 590,000 in Q2 2022, according to Ofcom, the industry watchdog, down 5pc. Amazon announced an increase in its fee from £1 per month to £8.99 in July.
Meanwhile, Netflix suffered a 1% drop in subscriber numbers, down 210,000 year-on-year to 17.1 million during the second quarter, as viewers tightened their belts to fight rising inflation.
Disney bucked the trend by adding 1.8 million subscribers to 6.6 million — a 38% increase — as the Star Wars producer became the world’s biggest streaming service, though its growth rate slowed by compared to previous months.
Overall, Ofcom’s Media Nations report found that the number of households subscribing to at least one streaming service dropped from 350,000 to 19.2 million.
Despite the slump, the media watchdog said some of those subscribers may return when economic horizons brighten.
The regulator said: “Cancellations do not necessarily represent customers who have been lost forever.
“Ofcom’s survey of unsubscribed subscribers earlier this year found that nearly three-quarters of customers said they thought they would resubscribe – reflecting the flexibility that allows customers to take and drop subscriptions depending on changing programs, needs or circumstances.” .
The data calls into question how resilient streaming services are to economic downturns, despite some analysts saying they have become a necessity families cannot do without.
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Sky was among the entertainment companies that had been resilient to recession in the past because it had few commercial competitors in the UK.
However, it is now showing signs of strain as the streaming revolution gives customers the option to downgrade to a cheaper provider like Netflix.
Sky reported earlier this year that the number of customers had dropped from 255,000 to 2.7 million in the three months to June as it faced “macroeconomic challenges across Europe”.
Ofcom found that subscribers to NOW, Sky’s streaming service, dropped by 220,000 to 2.1 million in the second quarter.
Disney has been among the outliers in the global streaming slowdown, as viewers have enjoyed the Star Wars series Obi Wan Kenobi and the Predator Prey reboot.
The world’s largest entertainment company added 14.4 million customers to its Disney+ streaming service in the quarter ended July 2, bringing total worldwide subscriptions to 221 million.
It is now slightly ahead of rival Netflix, which has been losing customers and has 220.7 million global subscribers in total.
Pressure to retain subscribers amid intensifying competition and tougher economic conditions has prompted Disney, Netflix and Amazon Prime to introduce advertising-funded options that make showing shows cheaper or free for viewers.
Meanwhile, Ofcom said the ongoing shift to streaming has meant the number of younger viewers watching free-to-air TV has dropped by two-thirds in the past ten years.