Heavy cancellations at Hulu Plus while Sling TV grows to top 10, says report

Heavy cancellations at Hulu Plus while Sling TV grows to top 10, says report
By Tamara Chuang
Jul 30 2015

In this wild west of new online pay-TV services, consumers have the luxury to try a new service and then cancel it — no penalties, extra payments or any commitment. And apparently, they are doing this in droves, according to a new report out by Parks Associates. 

Based on a survey of 10,000 U.S. broadband customers between April to June this year, Parks Associates found that 60 percent who paid for one of 75 online TV streaming services have canceled a service in the past 12 months.

During April to June this year, the research company surveyed 10,000 consumers who are also U.S. broadband Internet customers about which over-the-top services they have canceled in the past 12 months. This excluded free trials.

Netflix held up pretty well — only 4 percent of those surveyed had canceled Netflix. Parks extrapolated that to be about 9 percent of Netflix’s current subscriber base.

Another 7 percent canceled Hulu Plus, which doesn’t sound too bad until you learn that 7 percent of those surveyed represents “approximately one-half of Hulu Plus’s current subscriber base,” according to Parks. Hulu Plus also features a lot of network and cable TV shows that are seasonal, allowing fans to subscribe for just part of the year.

Among the 75 video-streaming services that Parks tracks, 60 percent of users had canceled one or more services in the past 12 months. 

What does this mean for the budding industry?

“For Netflix, it is great,” said Brett Sappington, Parks Associates’ director of research. “For the others, the results are a bit concerning. The low price point and high competition encourages consumers to try a variety of different services. Ultimately, services are going to need to retain customers in order to thrive.”

One local highlight is Sling TV, the service launched by Douglas County’s Dish Network earlier this year. Sling offers major cable channels, including ESPN, in an online-only plan for $20 a month. 

Sappington said that Sling is one of the top 10 online video-subscription companies in the U.S., based on the number of subscribers. Sling officials won’t reveal how many subscribers it has but tech publication ReCode has reported Sling has 250,000 paying customers.

“It is filling a unique niche, and Dish continues to refine the service to meet customer needs. Live sports is a driver of pay-TV services, so Sling TV should experience an uptick among football fans during the season,” Sappington said.


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