Subscription Fatigue Is Real. These Are the Stocks That Could Be Impacted the Most.

Elon Musk ignited a firestorm of discussion when he announced Twitter Blue, a subscription for verification on Twitter, earlier this month.

Many folks took to Twitter to say they don’t need another subscription in their life, which points to a larger issue:

Subscription fatigue.

The social media announcement spurred a six-week high in the number of consumers talking about the fact that they have too many subscriptions to manage.

To be clear, this fatigue has been building for months. This spring and summer, subscription fatigue mentions were up more than 40% from a year ago.

Any guesses on the main contributors to consumer pain?

Streaming services.

In the U.S., 58% of streamers pay for at least three different services.

This is a major shift from three years ago.

While consumers juggle more subscriptions, they’re also feeling the strain from inflation.

If more people are falling behind on payments and maxing out their credit cards, they may cancel their streaming services to save money.

Let’s take a deeper dive into this and see how the major players stack up…

Consumers and Subscriptions

We see strong evidence of content-based cancellations and renewals.

This appears to impact Apple TV, Disney+, and HBO Max most significantly.

You can see all companies logging extremely high rates of cancellation mentions on a year-over-year (YoY) basis while new content lags.

Meanwhile, streamers providing live content, especially live sports, appear more insulated.

Netflix Inc. (NFLX) is also outperforming peers, thanks to its wide library, but a 91% increase in cancellation mentions is nothing to brag about.

Which brings us to our second key takeaway…

Streamers Aren’t Loyal to Platforms

The premiere of “Yellowstone” (Season 5) was a prime example of consumers’ lack of platform loyalty.

The event lured 12.1 million live-plus-same-day viewers, its largest premiere yet.

But what’s critical is HOW it achieved this record viewership.

Aside from being generally good content, the series expanded streaming access.

Yellowstone wasn’t ONLY launched on Paramount Network. It supported simulcast airings on CMT, TV Land, and Pop (and streaming channels that provide access to those channels) – thus adding in more than three million extra viewers.

While access was technically expanded, many consumers still expressed frustration and confusion about how to watch the series.

Bottom Line: The Pressure Is Building

Consumers are getting wise to the streaming game, and they don’t have a personal connection with any provider.

Keep an eye out for streaming service consolidation over the next year, like the one we’re watching unfold with Discovery + and HBO Max, which will launch a new single interface in spring 2023.

These packaged buckets of content are likely to be well received by consumers, who care most about having a large library of quality content.

For our near-term outlook, we’ll be tracking cancellation mentions very closely. The New Year’s resolution season is a prime time for consumers to cut low-hanging fruit weighing on their wallet.

Members can expect a streaming update to kick off the New Year as we watch this all shake out.