Winter has finally come for Game of Thrones with its latest season finale having aired earlier in the week, which left the land of Westeros in as deep a crisis as it's seen in thousands of years. But with the HBO fantasy series now on hiatus until at least the end of next year, some viewers say they’re taking a break from HBO entirely - highlighting a challenge facing many entertainment companies in an era of constant stimulation and on-demand digital services.
Colleen Morrison, a Game of Thrones fan in New Jersey, signed up for HBO’s online streaming app in June. Now, Morrison says, it’s going to be an easy decision to cancel her subscription this week after she re-watches the season finale a second time.
“I didn’t mind paying the $15 each month because it’s the kind of show where I wanted an immediate viewing to avoid spoilers, but I’m also not interested in keeping the service since I’m not invested in anything else,” she said.
Morrison is part of a small, but savvy crowd of consumers who know exactly what they want out of their TV experience. Cost-conscious and empowered by the internet’s convenience-at-a-click mentality, these consumers take advantage of free trials, no-contract commitments and the media industry’s own struggle in the face of technological change to guard their wallets.
Ignoring the barrage of in-house teasers and promos for other related content, these viewers resist the siren song of TV networks who are being forced to battle one another for attention dominance. An abundance of high-quality TV shows from Netflix, Hulu and old-school cable programmers such as AMC, HBO and Showtime are helping some consumers become more discerning in their tastes - and less loyal. Abandoning one series or channel for another has never been more convenient or less risky.
“In a world where you can turn anything on and off whenever you want, you’re always fighting for my wallet,” said Rich Greenfield, a media analyst at BTIG. “I can cancel Hulu or Sling TV or HBO or DirecTV Now - any of these things have become ‘point at a button and click'."
The significance of this convenience is enormous. On traditional cable, TV programmers can easily retain customers because of the channel bundle. To extricate themselves from a single channel, consumers must often weigh the risks of losing many other channels and potentially breaking off a contract with their cable company. Even if it’s a small, premium tier they’re looking to shed, customers still have to brace for a time-intensive phone call with their cable provider, which many find off-putting.
“If I had to go through the whole process of adding cable to my Comcast package just to watch HBO or any other channel, I would not have done it,” said Morrison. “I know that’s why my parents waited so long to cancel their package - it just took too much effort.”
Because cancelling online is easy, you tend to see higher cancellation rates across the streaming TV industry, said Glenn Hower, a senior analyst at the market research firm Parks Associates. Although 1% of cancellations are by viewers discontinuing a free trial, many people appear to be spending a matter of months on a streaming service before switching.
“The churn numbers tend to be pretty high, indicating there are a substantial number of consumers subscribing to a service for a short time and then bailing,” said Hower. Studies by Parks Associates have found that, on average, streaming services manage to hang onto customers for little more than a year. Netflix enjoys more staying power than most, retaining customers for an average length of two-and-a-half years, says Hower.
Part of the secret to Netflix’s success has been a relentless string of hits, as well as its use of data to design shows that are highly tailored to specific audiences. There’s some evidence that other TV producers are also following this strategy; even as Game of Thrones as wrapping its season finale, HBO made sure viewers got a taste of its upcoming drama, The Deuce, which doesn’t debut until September 10.
“Your promos help remind people so at the end of the month they feel, ‘You know what, I guess we did watch stuff on the network this month,’” said Quentin Schaffer, HBO spokesperson. The company hasn’t noticed any immediate uptick in cancellations since the season finale of Thrones but it’ll be at least a month or two before any cancellations show in the numbers. HBO doesn’t make a habit of disclosing cancellation figures. The idea, in other words, is to hook people into becoming year-long addicts - which is far easier said than done, particularly when there’s so much other internet content, let alone other TV shows.
“Churn is the killer of all these direct-to-consumer services,” said Greenfield. - The Washington Post