BetterHelp is losing a lot of subscribers

Person using laptop. Thought Catalog via Burst, used under licenseOnline therapy platform BetterHelp is rapidly losing its paid subscriber base, according to financial filings from its parent company. The company reports a drop in average monthly paid BetterHelp subscribers, from 476,000 in the second quarter of 2023 to 425,000 in the fourth quarter. That’s a loss of more than 10% of its paid user base, despite significant marketing expenses aimed at growing the platform.

Teladoc, which owns BetterHelp, is a publicly traded company. Its share price has fallen from about $25 a year ago to about $15 today. Overall, the company continues to report losses, though it also reports being in a relatively stable financial position. Teladoc had more than $1 billion in cash on hand at the end of 2023.

In the company’s most recent earnings call, they expressed no concern over BetterHelp’s overall condition. The company continues to project slow growth for the online therapy platform, with much of that growth coming from overseas. They noted that the online therapy environment is presently a very competitive one, and that their marketing spend (especially on social media) hadn’t been providing the kind of return on investment they wanted.

A blip, or a trend?

But the loss of paid subscribers is certainly interesting. And while it is too early to say with certainty, it is at least possible that the drop in subscribers reflects a broader trend away from consumers paying directly for online mental health care.

Anecdotally, I’m hearing from some attendees at my workshops that their clients are increasingly requesting in-person services. BetterHelp competitor Talkspace has also been reporting sluggish performance in direct consumer spending on online therapy. Talkspace reported just over 11,000 “Consumer active members” at the end of 2023, a 24% drop from the end of 2022. However, the two companies operate a bit differently. Talkspace has positioned itself as in network with major health insurance providers, so some or even all of its drop in consumer subscriptions may simply reflect a change in how its services are being paid for.

In any case, investors may be paying close attention to BetterHelp’s subscriber numbers in 2024. They will want to see whether the past six months are a blip, or whether they reflect something bigger. Over a larger time scale, BetterHelp has experienced significant user growth. Teladoc reports that in 2021, BetterHelp had a monthly average of 307,000 paid subscribers. In 2022, that number increased to 419,000. So even with the drop in the last six months of 2023, the subscriber base continued to grow year-over-year. The question facing all of the major online mental health platforms is whether 2024 will be the year that trend line changes course.