UK consumers ditch SVOD services

The number of UK households with a subscription video-on-demand (SVOD) service continued to decline in the first quarter of this year, new data shows, despite the fact that consumers are still migrating away from traditional platforms to Internet delivery, as evidenced by reports of job cuts at Sky.

19.08 million UK homes, or just over 67% of households, had an SVOD service in the three months to the end of March, down by 1.7% from 19.42 million in the last quarter of 2022. The data comes from UK audience measurement body Barb, which has just published the highlights from its quarterly Establishment Survey.

The figures have fluctuated somewhat over recent quarters, but essentially there’s a broad downward trend in SVOD usage; 19.57 million households had an SVOD service in the first quarter of 2022, for example.

Barb did not provide any commentary on its figures for the most recent quarter, but it’s probably safe to surmise that the ongoing cost of living crisis is at least partly to blame for the slide.

Naturally, some providers performed better than others during the quarter.

One of the the standouts was Now, the subscription streaming service owned by Sky. Now saw its customer base increase to 2.3 million homes in Q1, that’s 8% growth compared with the 1.88 million homes it claimed at the end of last year.

The figures came out shortly after we learned that Sky is – probably – looking to cut jobs in the UK. Over the weekend the Financial Times reported that the firm is about to shed “hundreds” of jobs across the country as it shifts its focus away from satellite broadcasting to Internet TV.

According to the paper, Sky informed staff affected by the restructuring of its plan last week, but has yet to finalise the actual number of job cuts because it must first negotiate with trade unions and employees. Its sources said the job losses could be in the “high hundreds,” out of a workforce of 32,000, but would not be as extensive as those planned by its rivals in the telecoms space.

The sources were, of course, referring to the staffing cuts announced by Vodafone and BT in recent weeks. Vodafone’s new chief executive Margherita Della Valle started her tenure at the helm by announcing 11,000 job losses across Europe a fortnight ago as part of a much-needed turnaround plan, while just days later BT revealed it will shed as many as 55,000 staff, or 40% of its workforce, by the end of the decade.

The FT notes that there will be new hires at Sky, with the firm planning to open a new film and TV studio later this year, but that will be small comfort to many of those in the firing line. The job losses will mainly come in traditional areas of Sky’s business, the paper said; the provider will need fewer engineers to fit satellite dishes as the focus switches to streaming services, while some customer service roles at the legacy business will also change.

Sky’s decision to focus more on the streaming side of the business comes after years of competition from Netflix and Amazon. But Barb’s data shows that those companies are not having a particularly comfortable time of it at present.

The UK’s biggest streaming platform Netflix saw a 1.1% decline in households using the service in Q1, which is a fair number of customer losses considering its overall base stands at 16.96 million households. Amazon Prime Video and Disney+ posted declines of 1.7% and 1.9% respectively to end the quarter serving 12.9 million and 7.14 million homes.

The big winner in terms of percentage growth, albeit from a smaller base, was Apple, whose Apple TV+ was present in 1.91 million homes, an increase of 13% during the quarter.

Essentially, the data shows that UK consumers are still keen on SVOD services, but they are being very picky about where they spend their entertainment budget. Food for thought for the SVOD providers.

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