Americans now subscribe to more streaming-video services than ever before: the average consumer in the United States currently pays for four different services, from three pre-covid-19s, according to a new study from Deloitte.
But the segregation-driven binge in subscription VODs may be short-lived – Deloitte’s analysis suggests that many people may be left behind due to the lifting of coronavirus restrictions or economic hardship.
For the 14th annual edition of Deloitte’s Digital Media Trends Study, consulting and professional services firms conducted a pre-Kavid-19 survey in December 2019-January 2020 and a second survey after the start of the 2020 epidemic. About 70% of U.S. subscribers now subscribe to at least one paid streaming video service, up from 733% in the Pre-Covid-19 survey (and 9% in Deloitte’s study last year).
As more media providers join the fight, such as SVOD, it puts pressure on content and price. And customers are increasingly frustrated trying to navigate the flood of streaming options while trying to manage costs. According to Kevin Westcott, chairman of Deloitte and U.S. telecommunications, media and entertainment leader Kevin Westcott, the growing degree of “subscription fatigue” could lead to cancellations, as well as pressure on more viewers for free, ad-supported streaming options.
“People have more time on their hands, and they keep trying new things,” he said. “But at the same time, we’re seeing significant amounts of churning.”
According to Deloitte’s May survey, some consumers sign up for free testing, then cancel after the trial is over or after they finish the series of their choice, and switch services in search of new content.
Pre-epidemic, 20% of streaming video subscribers have canceled at least one service in the previous 12 months. Since the epidemic began, a staggering 17% of customers have reported that they have already canceled at least one service. Top reasons for cancellation: high cost (36%) and expiration discount or free trial completion (35%). Note that Disney Plus recently pulled the plug on its seven-day free trial (Lynn-Manuel Mirander’s “Hamilton” movie will arrive a few weeks before it is ready to begin streaming on July 3).
Netflix, Hulu, Disney Plus, Amazon Prime Video, HBO Max, CBS all have access – and much more – as SVOD Month commitments intensify as consumers fight for wallet partnerships. Deloitte’s survey found that 39% of American consumers reported a decline in their family income since the epidemic began.
“The competition to attract and retain customers has never intensified because of spending less money to spend,” Westcott said.
All of this points to an opportunity for free, ad-supported video streaming services to reach their audiences. During the epidemic, 47% of consumers said they used at least one free ad-supported streaming video service. Most U.S. consumers say they want access to cheap (advertising) streaming video options from both before (62%) and COVID-19 epidemics (65%).
Westcott said, “The industry can not only add new paid subscriptions, there are more than 300 unique subscription-video platforms in the United States alone.
Other searches from the Deloitte study:
- Subscribers say they are attracted to a wide range of TV shows and movies (51%) and video services, including exclusive original or library content (45%).
- Overall, 22% of subscribers (30% of General Z and 36% of Millennials) paid to have first-run movies streamed during the epidemic. Of those who did, 90% said they would probably do it again. Among those who did not, 42% said the price was too high.
- About one-third of consumers said they would not feel comfortable participating in live events for the next six months. There is a significant generational divide: 50% of millennials and 47% of General Z respondents said they would agree to take part in a sports event in the next six months, as opposed to 28% of Boomers.
- Video gaming increased during COVID-19. Since the coronavirus crisis began, 48% of U.S. consumers have participated in some video gaming activities – the younger generation is overindexing here (69% of millennials and 75% of General Z). Prior to COVID-19, 25% of subscribers watched live streams and recorded videos playing games (including about 50% of Millennium and General Z). According to Deloitte, the epidemic continued during the epidemic.