New Study Predicts ‘Subscription Fatigue’ Will Rise as SVOD Options Increase Amid COVID-19 Pandemic
As the SVOD arena continues to be saturated with new services each year, it looks like there may be some downsides coming along with its growth. In the 14th annual edition of Deloitte’s Digital Media Trends, Deloitte found that subscription fatigue may rise, turning customers away from SVODs as options increase.
The study was conducted in two sections — pre-pandemic between December and January and then in May after the onset of COVID-19 — and found that “the average U.S. consumer currently pays for four different services, up from three pre-COVID-19,” Variety stated. The study also found that roughly 80 percent of U.S. customers have at least one paid subscription video service, a slight uptick up from 73 percent in the pre-COVID-19 survey.
However, Deloitte also warned that the influx of options may backfire as customers continuously try to wade through new services and manage costs at the same time. Kevin Westcott, vice chairman of Deloitte, dubbed this process “subscription fatigue” and speculated that it may actually lead to more cancellations.
“People have more time on their hands, and they’re trying new things,” he stated. “But at the same time, we are seeing a significant amount of churn. With less money to spend, the competition for consumer attention and retention has never been fiercer. The industry can’t just keep adding new paid subscriptions.”
The study also found that 20 percent of customers canceled at least one service in the last 12 months pre-pandemic. However, since the lockdowns were instituted, 17 percent of consumers revealed they had already canceled at least one service. Respondents cited high costs as well as expiring discounts or the end of free trials as some of the top reasons for cancellation.
The churn in the SVOD lane may open up more room for ad-supported streaming services. Deloitte’s survey found that 47 percent of consumers used at least one AVOD during the pandemic and that overall “customers want access to cheaper, ad-supported streaming video options, both before (62 percent) and since the COVID-19 pandemic (65 percent).”