Survey: 43% of Streaming Users are Maxed Out on Subscriptions; Highest Spenders Are Most Likely to Churn
Prices only ever seem to go one direction: up. That’s as true in the streaming industry as it is in seemingly every other marketplace, but new data from Hub Research shows how this pricing dynamic is affecting consumer habits, and what streaming providers should do about it.
Hub’s survey finds that nearly half of consumers (44%) say they spend more on TV than they did a year ago. The median user spends $85 per month on TV, a full 25% more than what consumers identify as a “reasonable” amount. It helps to show the saturation of the streaming market, as well; 43% of respondents to Hub’s survey said there was a maximum number of streaming services they could afford to sign up for, and that they had already reached that limit.
These numbers reinforce a study from last week, which showed that by next year North America will drive less than 50% of total global streaming revenues for the first time. The American streaming market is simply quite simply full, and users have reached the limit of services they can stack on top of each other at the same time.
This data also explains why so many customers are turning to cycling instead of keeping their streaming subscriptions active after they’re finished watching a particular title. Hub’s data shows that users who spend the most are most likely to cycle; 55% of customers who subscribe to four or more streaming services have canceled at least one in the past six months. Of users who are signed up to just one streaming platform, only 16% have canceled in the same timeframe.
This shows that price is less important of a consideration to many users than value. But what can streamers do to ensure their platform is seen as a good value? According to Hub, the factor people prize most highly is price stability. Having a low price is clearly the most important attribute to users, but the second-most important is the knowledge that the subscription rate will stay consistent in the future. Conversely, the ability to rent shows and movies is seen as the least important quality a streamer must posses in order to be labeled a good value.
“The video ecosystem is clearly at an inflection point,” said Mark Loughney, senior Hub consultant. “Gone are the days when providers could reliably count on revenue growth from new subscribers. This leads to a quandary: how to deliver the volume of content necessary to keep subscribers loyal, while at the same time controlling production costs. Reconciling this dilemma will be the key to long term success in the video marketplace.”
Many streamers are turning to ads to help them solve this predicament. Ad-supported plans bring in more money per customer than traditional ad-free streaming does and is usually priced at a lower cost than plans without commercials. Netflix and Disney+ launched ad-supported plans in late 2022 to compete with HBO Max’s, and Amazon is reportedly working on a tier of Prime Video that will feature commercials.
Amazon Prime Video
Amazon Prime Video is a subscription video streaming service that includes on-demand access to 10,000+ movies, TV shows, and Prime Originals like “The Lord of the Rings: The Rings of Power,” “Jack Ryan,” “The Marvelous Mrs. Maisel,” “The Boys,” and more. Subscribers can also add third-party services like Max, Showtime, STARZ, and dozens more with Amazon Prime Video Channels. Prime Video also offers exclusive live access to NFL Thursday Night Football.