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Franchises are What Stops Churn for Streaming Services

The Los Angeles Times recently dove into an October Deloitte survey saying that 46% of respondents cancelled at least one streaming service within the last six months — a big increase from the 20% that said the same at the start of 2020.

As the piece gets into, one of the primary culprits for the increase is clearly “churn,” though the reasons for that aren’t standard for all viewers. Considering one of those surveys was conducted pre-pandemic and the other was many months into it, you could infer a number of different churn motivators. For some, it was probably cost. For others, a deal of some sort that either started or expired, and they were looking to streamline entertainment choices in a growing sea of them. Programming is a big driver, too — and that’s what we’ll focus on here.

Because while churn does exist, some services are better equipped to combat it than others.

At current, Hulu’s draw is the back catalog of content, with a handful of original shows that pop up just enough to make you feel like the spend’s worthwhile. Netflix has caught lightning in a bottle numerous times with series like “House of Cards,” “Master of None,” “Russian Doll,” “The Queen’s Gambit” and a slew of other interesting original series over the years. Yet, continuing that momentum is tough, and one could argue it’s been awhile since the service has really owned the zeitgeist. Netflix is everywhere at this point, and its embrace of various forms of comfort food TV make it even more relevant as a constant in culture, rather than a spike. However, they haven’t gotten into the consistent money-making that long-standing series provide. Maybe they don’t need to, either. But Netflix could be the only SVOD service really above the franchise game — along with Amazon, perhaps, who’s in an entirely different business altogether anyway.

Those that aren’t? The likes of Disney+, HBO Max and Apple TV+, at the very least.

Disney has its existing IP and that’s a major draw. But it’s the original programming attached to that IP that’s going to keep viewers subscribed. As the one-year anniversary of its launch approached last fall, it dropped season 2 of “The Mandalorian” to make sure it converted as many free subscribers as possible into paying customers, while also keeping those paying interested. From here on out, though, it’s the Marvel franchise that’s going to drive that anti-churn train. Starting with last week’s “WandaVision” premiere, you’ll likely be seeing a new Marvel show debut within a week of the last one ending for years to come. That, plus a similar approach for Star Wars content won’t allow for churn.

HBO Max has existing IP, but as we’re about to hit wo years since the “Game of Thrones” series finale, there’s a lingering question about what drives consistent tune-in there, and stops churn. “Friends” can’t be it, given the amount that show still appears in syndication on linear TV. “Westworld” lost its early momentum by season two. Other dramas are acclaimed, but lack to event pop. Perhaps the slate of Warner movies set to hit the service keep people around in 2021, but what happens afterward? If releases go back to theaters, HBO Max once again has questionable value as much more than a streaming extension of the premium cable channel.

Apple TV+ simply doesn’t have enough content — original or otherwise. Maybe that changes. But no amount of positive “Ted Lasso” reviews (and there are rightfully a lot of those) can keep a service afloat on their own.

Again, it’s the franchise model that’s going to keep things going for most of these services, helping fight churn by making it impossible to look away. It’s not a new concept, either. Broadcast networks have been playing this game for years, even as audiences became more and more predicated on the value found in airing live events (which they largely own all the rights to). Movies have too, as franchises have largely taken over the box office. Studios see the recurring revenue of franchises and shared cinematic universes as the primary way to make money with theater releases at this point. It shouldn’t surprise that the two most financially successful franchises of all-time — Marvel and Star Wars — are the ones now charting the course for how streaming services both find initial success and stay relevant into the future.

Saying you need franchises and finding those franchises, of course, are two different endeavors. And if everyone knew what sort of franchises were bound to be successful, they’d just make them. The Netflix money cannon approach sounds like the easier way to go in some respects — relying on quantity over quality to keep subscriptions on board. But Netflix also has access to more money to do that than anyone else in the streaming wars does, without as much of the legacy media business pulling it in the opposite direction. So… franchises, it is? We’ll wish everyone luck in finding that next would-be billion-dollar media brand at this point.