The art of churning

Few people remember the bloated cable bundle with fondness—a hundred channels and still nothing to watch. Streaming video on demand promised to deliver us from our ennui, but now that we’re more than a decade into the streaming era Americans still struggle with navigating their TV options. And that’s bad news for the streaming platforms.

Up until last year, Wall Street was bullish on the future of streaming. Major players like Netflix offered blank checks to creators, while other media companies rolled out their own services hoping to catch up. The spending bonanza on “peak TV” saturated the market, overwhelming viewers and spooking investors.

Streamers tend not to share much data—either out of fear of losing a proprietary edge or fear that low watch rates might scare away potential subscribers and investors—making it difficult to know what metrics these companies use to define success. Recently industry analysts at Puck adopted a different evaluative approach, conducting a study of consumer brand attachment: Could viewers remember which streamer offered which hit shows? None of the streamers achieved excellent results, though Netflix and Disney+ fared better than average. Still, the study confirmed the idea that streamers have largely failed to differentiate themselves.

The result: viewer frustration with both overlap and overwhelm—and aggregated monthly streaming bills that approach the price of the old cable bundles. So how do streamers differ? Here’s a quick rundown:

Netflix might have seen its stock price tank last year, but it’s still the top streaming option for most people. With more than 230 million subscribers worldwide, the entertainment giant commands a sizable lead over its competitors. It also has the highest brand attachment, and more people remember which shows it offers. It’s one of the only streaming platforms to turn a profit, giving it a competitive edge in acquiring and ­producing original content. The platform offers a near-continuous stream of new shows each month geared toward both ­children and adults.

But Netflix’s tech is probably as impor­tant as its content. Its recommendation ­algorithm is more sophisticated than its competitors, and for families, Netflix has an advantage over many other streaming services because of its robust parental controls. Adult accounts can be locked with a pin, so children can only access age-appropriate content. Netflix also allows parents to block titles on a case-by-case basis. Does a certain show promote ideology you find troubling? No problem, just tell Netflix to hide it from your kids.

While Netflix is still the gold standard of streaming services, Disney’s advantage is strong brand identity. When the company launched Disney+, its signature streaming service, in 2019, membership immediately skyrocketed. Today, Disney+ is the third-largest streamer with more than 160 million subscribers. Disney owns the world’s most valuable intellectual properties, and it has a reputation for high standards. Disney animation, Star Wars, and Marvel enjoy dedicated fan bases, and subscribers tend to keep their ­subscriptions, feeling Disney’s movies and series have high replay value for both children and adults.

Scene from Netflix’s The Crown. Des Willie/Netflix

Last summer, Disney added a few R-rated superhero movies and TV-MA series to the platform. When it did, it also improved the parental controls. Now, Disney+ has the second-best parental controls after Netflix. However, the platform still doesn’t allow parents to block individual titles.

It might seem strange Disney+ would add any content targeted solely at adults, but the company claims half its subscribers have no children in the home. Perhaps we’ll see more content aimed exclusively at adults in the future, but returning CEO Bob Iger wants to restore Disney’s squeaky-clean image. In February, he expressed concern about “undifferentiated general entertainment,” indicating Disney will strengthen branding through proven strategies and franchises.

Warner Bros. Discovery, however, has found the strong brand identity of HBO Max something of a liability. The streaming service has about 80 million subscribers, and those subscribers rate it highly, but many families have avoided it because the HBO brand doesn’t communicate family-friendly entertainment. Warner Bros. Discovery has realized this problem, and on May 23, it will shorten the platform’s name to simply Max, communicating the ­service offers more than HBO shows.

Its library includes most Warner Bros. films, including movies from DC Studios and classics like The Lord of the Rings trilogy and Casablanca. The ­service also includes Discovery shows like those of Chip and Joanna Gaines.

So far the rebrand doesn’t include much to attract families with small children. The kids’ programming is anemic, and its parental controls aren’t as effective as those of Netflix or Disney+. It’s also one of the most expensive streaming platforms.

Of the large streamers, Prime Video has the worst reputation. Amazon actually jumped into streaming before Netflix did, but Netflix quickly surpassed the online retailer in innovation and content. Today, Amazon’s Prime Video has about 200 million subscribers (the company doesn’t report exact numbers), but many people subscribe as part of the broader Amazon Prime program that offers faster shipping of packages.

Amazon offers less original content than Netflix, and it licenses much of its catalog, which means movies and series are constantly added and removed from the service, making it especially difficult for subscribers to keep up with what’s available. Prime Video also lacks focus and brand identity, but recently Amazon has worked to differentiate itself from competitors with splashy originals like The Lord of the Rings: The Rings of Power. Last year, Amazon also acquired MGM Studios and its catalog, which includes the James Bond franchise.

Recent programming decisions indicate Amazon is pursuing the young adult male demographic, but it’s hard to say whether these moves are paying off. Nielsen recently reported The Lord of the Rings series had an abysmal completion rate of 37 percent—meaning nearly two-thirds of viewers abandoned the series instead of watching all the way through.

No one but Amazon knows whether those low ratings matter, because the company’s video content doesn’t need to be profitable. If a Prime Video series drives retail sales on the site, Amazon wins no matter how many people tune in.

Prime Video might not be beloved—it’s the only service that scored worse with its subscribers than with the general public—but it’s popular and flexible. Users can buy or rent most content even if it’s not available through the subscription. However, Prime Video’s parental controls are lacking. They’re geared toward guarding against accidental purchases, rather than keeping kids from inappropriate content.

Scene from Prime Video’s The Rings of Power. Matt Grace/Prime Video

Fighting over the scraps of the streaming wars, Hulu, Paramount+, Apple TV+, and Peacock have struggled to distinguish themselves. Hulu, owned by Disney and NBCUniversal, was an early entrant, but Disney’s focus on Disney+ cast Hulu adrift. When Iger complains about “undifferentiated ­general entertainment,” he’s likely signaling his willingness to sell Disney’s stake in Hulu. Until ownership changes hands, expect Hulu to continue floundering. Paramount+ has a library that contains most films from Paramount Studios and series from CBS, including Star Trek and classic Westerns. Apple TV+ is one of the cheaper options, but it also has the smallest library. Apple focuses on prestige TV, spending lavishly on high production values and big stars, but like Amazon, Apple doesn’t need its streaming service to turn a profit. Its shows cater to the tastes of more affluent adults, and they often contain foul language, but to its credit, Apple avoids nudity. NBCUniversal’s Peacock is the smallest of the streamers in terms of subscribers, but its library is fairly well stocked with the studio’s back catalog.

While the various platforms attempt to distinguish themselves in a bid to win the streaming wars, what does winning look like for consumers? How can a household maximize its entertainment dollars?

Families should identify one or two core streaming services that best suit their needs, and for the rest, they should perfect the art of churning. Aggressively cancel underused subscriptions, then resubscribe when that must-see movie or show hits the ­platform. After resubscribing, cancel again—you can even cancel the same day. Streamers will let you watch for the entire month you’ve paid for, and by canceling immediately you won’t accidentally pay for the second month you don’t need. Don’t worry: They’ll let you sign up again if you can’t finish your binge watching in a single month.

As consumers become more selective, streamers will have to be more intentional about what kind of brand they wish to cultivate—which in turn will make it easier for families to decide whether they want to subscribe.