Whether it’s subscriber numbers decreasing, ad-supported options becoming increasingly popular, or being inundated with impenetrable mountains of content, the streaming landscape is certainly changing. However, thanks to Hub’s 2022 Best Bundle study, we have some insight into how consumers are behaving and adapting given everything that is influx across the streaming industry.
The study indicates that the average number of sources that viewers use to access TV content has reached an all-time high. From traditional TV outlets to live TV streaming services; from subscription video-on-demand (SVOD) services to ad-supported video-on-demand (AVOD) and free ad-supported TV (FAST) options, the average U.S. customer uses seven sources to get their TV content.
That number is up by 1.7 services per person since last year and has been climbing exponentially since 2018 when the total was just three.
This climb has seemingly been fueled by continued SVOD growth. In fact, over the past two years, streaming subscription services have seen an additional 12% penetration domestically, bringing them to near-universal penetration in the U.S. at 89%
While traditional pay-TV service (cable, satellite, etc.) is down five points since 2020, live TV streaming services like YouTube TV, Hulu + Live, and Sling TV make up for the difference, climbing the same five points.
The 12-point increase since 2020 in terms of SVOD adoption has led to consumers combining an increasing number of services into their entertainment bundles. When it comes to the “Big 5” SVOD services — Netflix, Prime Video, Hulu, HBO Max, and Disney+ — half of TV customers subscribe to at least three of them.
That is up 10% year-over-year and nearly double since 2020.
However, SVODs are not the only streaming category that has seen a marked improvement in recent years. Customers are increasingly turning to AVOD and FAST options like Pluto TV, Tubi, Freevee, and the Roku Channel for entertainment.
Use of these free services reached 58% of consumers in Hub’s 2022 study, up 10 points since last year and 18% over 2020. Clearly, the pendulum is swinging towards further acceptance of ad-supported streaming options as these free platforms are becoming more and more popular, but the lesson has not been lost on the biggest SVODs.
While Disney+ and Netflix are readying plans to introduce lower-cost, ad-supported tiers later this year, Hub notes that the distribution of ad-free vs. ad-supported subscribers differs dramatically across the five major SVODs that offer both options.
HBO Max has the largest percentage of subscribers signed up for the ad-free experience (67%), followed by new corporate sibling discovery+. Peacock, whose ad-supported tier is free to Comcast cable subscribers, has the smallest portion opting for its ad-free version at just 20%.
Despite widespread concerns about declining subscriber numbers, consumers don’t plan on slowing down accumulating streaming subscriptions anytime soon. According to Hub’s research, more than three-fourths of respondents plan to add even more new services to their entertainment bundles in the next six months; up five points since 2021.
The main reason behind the indefatigable march toward universal streaming adoption is that every platform — SVOD and AVOD alike — is turning out new, stream-worthy content that certain subscribers just don’t want to miss.
Among customers who subscribe to four to seven services, only a slight majority feel that all of their entertainment needs are met “very well” by their current slate of platforms. It’s not until customers amass eight or more services that a nice proportion (69%) are able to say the same about their TV lineup.
While there has been justified hand-wringing across the industry as of late as companies and analysts fret over the seemingly inevitable slowdown of streaming adoption, Hub’s research shows that while the end of unincumbered growth might be coming, it’s not here just yet.