New Analysis: US Over-the-top Video Service Subscriptions Predicted to Exceed 277 Million by 2026

Is streaming still the future of at-home entertainment? More consumers are continuing to cut the cord and switch to over-the-top (OTT) video streaming subscriptions. A new whitepaper from Parks Associates shows that OTT subscription numbers are continuing to rise, and it doesn’t look as if subscribers will lose interest in the near future.

There are currently nearly 230 million OTT subscriptions in the US. Parks Associates predicts that the number of subscriptions will increase to over 277 million in 2026. That is a 20% increase in the next five years.

People of all ages appear to be driving the increase in OTT subscriptions. Parks Associates reports that 80% of millennials and Gen Zers view video on more than one platform monthly. While younger consumers are using multiple platforms, they are less committed to specific services.

Younger consumers subscribe to a service for a short time and then switch to a different service, churning through them. They may use a service to binge-watch a show and then cancel the service before they are charged again. Subscriber churn is something that many streaming services see happening as consumers search for a way to reduce monthly entertainment costs while still having access to streaming their favorite shows and movies.

Parks Associates reports that in Q1 2021, US broadband households retain OTT subscriptions for an average of two and a half years. Older consumers kept their subscriptions for longer, while younger consumers were less likely to do so.

“We know all too well the changing digital media landscape and its impact on the customer experience. The delivery and digestion of streamed content market is heavily influenced by the ability to attract and retain viewers,” said Dave Palmer, President, Everise. “To ensure a positive brand experience, media companies must consider a myriad of preferences and behaviors – age, viewing habits, interests, available time, platform preference, etc. The emergence of multiplatform viewing further drives the need for these brands to protect both themselves and their customers with a multichannel content moderation and omnichannel support strategy.”

Palmer continued, “Information providers can design support services that appeal to consumers at different life stages, who prefer different channels, and adapt as their needs evolve.”

“People move out of their parents’ home, go to college or get a job, establish a career, marry and have children, eventually the children move out, and then they retire,” said Kristen Hanich, Senior Analyst, Parks Associates. “Throughout each stage, a consumer’s wants, needs, and priorities change as well. Of course, people are different and not every individual goes through every stage. These are trends that apply on a population level and are a useful way for marketers and businesses to target cohorts of individuals going through similar experiences.”

There have been many questions about the future of streaming following the pandemic. While the end of the pandemic might not be in sight quite yet, streaming companies will have to find a way to keep subscribers on board long-term.

“Brands can leverage new engagement data to help design new services and improve their customer support and retention strategies, offering value to consumers both at-home on different platforms and on the go,” said Hanich.