As Stacking Declines and Free Streaming Rises, Are Customers Demanding Greater Aggregation from Streaming Services?
Free ad-supported TV (FAST) is inarguably here to stay. People are increasingly thinking of FAST as the perfect supplement to their subscription video-on-demand (SVOD) services, allowing free streaming channels to push broadcast and cable TV to the brink.
But are users also starting to think of FAST as a way to replace their streaming subscriptions? That may well be the case, according to new data from the entertainment research company Hub and the TV ratings firm Nielsen. According to Hub’s findings, the number of customers who subscribed to at least one streaming platform dipped from 89% in 2022 to 82% so far in 2023. Between streaming, cable and satellite providers, and FAST platforms, FAST was the only segment that has not seen a notable drop-off in viewing so far this year.
Hub’s data also shows that consumers are not planning to add more streaming subscriptions to replace those they may have cut. Only 27% of respondents to Hub’s survey report they expect to sign up for a new streaming service in the next six months, down from 33% who answered affirmatively to the same question in 2022.
Users are also signing up for fewer of the biggest streamers on the market at the same time. The numbers from Hub indicate that customers are stacking “The Big Five” —Disney+, HBO Max, Hulu, Netflix, and Prime Video— at the lowest rate in two years. In 2022, 50% of respondents to Hub subscribed to three or more of these services; now only 43% do so.
Hub’s data is reinforced by new research released by Nielsen, which shows that Netflix viewing in the month of April has dropped by seven percentage points. Conversely, free streamers Tubi and Pluto TV saw their viewership increase by six and three point nine points, respectively. Users weren’t turning off their TV last month, they were just watching FAST channels and free ad-supported on-demand content more often.
When combined, these numbers could indicate a greater demand for aggregation from streaming customers. Subscription video streaming is getting more expensive all the time, and multiple services have announced their intention to raise prices in 2023, including Disney+ and Paramount+. The Streamable was the first outlet to report that Peacock was no longer offering its own free tier in 2023, and while no price increase has been announced for that service, its low monthly rate of $4.99 and its increasing library of originals and live sports could indicate a price jump is not far off.
The numbers from Hub and Nielsen show that streaming users are noticing their streaming bills climbing. That would certainly help explain why fewer customers plan to subscribe to a streamer in the next six months; they’re waiting for more streaming platforms to merge together, and in the meantime, they’re turning to free streamers to fill in any gaps in their entertainment needs.
The good news for users waiting for increased aggregation from the streaming market is that more combined services are coming. HBO Max will integrate most of the content from discovery+ on May 23, creating a new streaming platform called Max. Warner Bros. Discovery executives have confirmed that, despite the large increase in content on the service, it will maintain the same $9.99 for ad-supported streaming/ $15.99 for ad-free streaming price structure HBO Max currently has for the foreseeable future.
Paramount+ will also merge with another streaming platform this year, as it will integrate with the premium cable channel/streamer SHOWTIME this summer. There will be a small price increase, but the $11.99 per month users will pay for Paramount+ with SHOWTIME is still markedly less than the $20.99 customers who sign up for the two streamers separately have to pay. Disney is planning to bring Hulu and Disney+ together as a “one-app experience,” though there has been no talk of combining the streamers onto one platform for a lower price as of yet.
If those platforms see a big influx of new users as soon as they become available, it will show the rest of the streaming world how desperately customers want greater aggregation. Until then, users will bide their time watching the growing amount of FAST and other free TV available on platforms like Pluto, and let their money do the talking for them.
