In its recent 2024 first-half State of Viewership report, Samba TV shared data highlighting which TV shows are most likely to be watched by viewers who consume only a single show on major subscription video-on-demand (SVOD) platforms. I love this data point because it addresses a critical, often misunderstood element of programming strategy: acquisition vs. retention.
Anyone familiar with the streaming industry knows that maintaining a balance between viewer acquisition and retention is key to long-term success. Yet, despite this understanding, many platforms struggle to execute on this effectively. Combining data sources reveals an emerging imbalance, with platforms prioritizing acquisition over retention. Here, we’ll explore how and why the industry is taking a wrong turn.
One-and-done viewership
According to Samba TV, during the first half of 2024 in the U.S., certain shows are predominantly consumed by viewers who watch only a single title on a platform. These “one-and-done” shows include Fool Me Once (Netflix), Masters of the Air (Apple TV+), Reacher (Amazon Prime Video), True Detective (Max), Percy Jackson & the Olympians (Disney+), Shogun (Hulu) and HALO (Paramount+).
Data from Parrot Analytics, where I work as a Senior Entertainment Industry Strategist, expands the understanding of these shows’ performance by showing the percentage of viewers who watched them and then engaged with other content on the same platform. Put another way, if I were to watch Stranger Things on Netflix (NFLX), Netflix would love to see me continue watching other shows on the platform afterward. All of the above titles ranked poorly in year-to-date consumption affinity within their respective catalogs: Fool Me Once (23.9 percent), Masters of the Air (9 percent), Reacher (16.4 percent), True Detective (18.2 percent), Percy Jackson (9.4 percent), Shogun (22.8 percent), HALO (10.5 percent).
One-and-done shows primarily serve as acquisition drivers. They spur new subscriber sign-ups, which is crucial for all streaming services. Yet watching just one series before canceling a subscription represents a losing battle for the industry. To generate a return on investment, streaming services need subscribers to remain on the hook for up to 15 months, according to Deloitte. That’s increasingly hard to attain in the era of endless TikTok scrolling and shrinking attention spans. This is where the current programming strategy is creating longer-term issues.
The flawed focus on acquisition at all costs
Most streaming platforms classify subscribers into high-risk and low-risk categories based on their monthly viewing hours. High-risk subscribers are those who watch fewer hours per month, while low-risk subscribers consume significantly more. If a viewer is watching 18 to 20-plus hours monthly, they are much less likely to cancel. However, those who watch fewer hours are more prone to churn.
Many platforms prioritize acquiring and retaining high-risk subscribers, which requires directing significant resources toward broad-appeal, high-budget shows that are designed to attract new subscribers and re-engage infrequent viewers. While this strategy can work during the early stages of growth, it becomes less sustainable as platforms reach market saturation—especially in regions such as the U.S., where Netflix has more or less hit a ceiling. This is one of many reasons Netflix is rejiggering its deal-making structure while Apple and Amazon are reportedly looking for similar cost-cutting initiatives.
In the good old days of the pay-TV model, cable networks hoped to develop a few breakout shows that were complemented by less-expensive middling fare. These days, in the throes of the streaming boom, a consistent tide of hits must always be rolling in to prop up the business model. But without a strong library of retention-driving content, churn remains a persistent issue, threatening the financial stability of these platforms.
Subscriber retention is increasingly important but difficult
The subscriber churn of premium monthly SVOD in the U.S. has ranged from 3.9 percent to 6.0 percent since 2022, per Antenna. As of June, the industry average was a hair under 5 percent. That means major SVODs such as Hulu (5.2 percent), Max (6.3 percent), Peacock (6.4 percent), Apple TV+ (7 percent) and Paramount+ (7 percent) have work to do while Netflix (2 percent) and Disney+ (4.2 percent) are more comfortable (for now).
Higher churn rates often indicate higher customer acquisition expenses. In other words, the more current subscribers cancel, the more streamers have to spend to attract new ones That’s the headache-inducing hamster wheel streaming executives have been marooned on in recent years. As a result, improving retention increases the lifetime value of a subscriber, often lowering the relative cost of acquisition.
However, due to rising production costs, shrinking audience and declining ad sales, linear TV is making less of the wide-net scripted programming that helps generate the majority of long-tail engagement on streaming. Even big-budget streaming originals can struggle to keep viewers within a single digital ecosystem for an extended period of time.
In the last week, of the 10 shows viewers watched most alongside Fool Me Once, just two were available on Netflix U.S., per Parrot Analytics consumption affinity data. It doesn’t get much better for the other one-and-done titles: Masters of the Air (3/10), Reacher (1/10), True Detective (3/10), Percy Jackson (3/10 if you count a title on Hulu), Shogun (2/10 if you count a title on Disney+), HALO (2/10). Big hit shows are great, but they may be cost inefficient if they consistently leak viewership to rival platforms. (Release date plays a role when looking at just one week of consumption affinity, of course, and many of these titles have been available for months).
Retention-driving content, in contrast, encourages subscribers to stay within a platform’s ecosystem. According to Parrot Analytics, some of the top titles for retention in 2024 so far include:
- Netflix: Captains of the World (47 percent of audiences that watched this show watched another title available on Netflix US)
- Max: Property Brothers: Buying & Selling (45.7 percent)
- Hulu: Dance Moms (40.4 percent)
- Amazon: Dahaad (25.6 percent)
- Disney+: Marvel’s The Defenders (23.1 percent)
- Peacock: Winter House (22.4 percent)
- Paramount+: FBI: International (22.2 percent).
Frequent engagement not only drives retention but also fosters habitual viewing behavior. Netflix, for example, benefits from being the default streaming in both perception and usage metrics. Frequent engagement is also valuable to advertisers, who seek assurance that viewers are spending extended periods in an app and being exposed to their ads. (They also want to be present on those breakout acquisition drivers too, of course).
What to do
Programming strategy is on a case-by-case basis; what works for Netflix may not work for Apple TV+, and vice versa. However, the need for balance remains universal. During the early heated race of the streaming wars, rival platforms fought fast and furiously for the splashiest original and licensed titles, usually at immense costs. Now that these broadcast battles have cooled to a degree and the industry is maturing, the focus is shifting toward optimizing content libraries to build the most sustainable road to profitability.
Streaming services will always need blockbuster hits like Stranger Things or Shogun to bring new users into the fold. But don’t underestimate the ability of a Suits or Family Guy to keep them there and help companies manage costs, reduce churn and improve the lifetime value of their subscribers.
