As the growth of streaming slows, service providers need to exploit their opportunities wisely
Ahead of Netflix’s announcement of its second quarter financial results later this month, Simon-Kucher’s latest study shows that Australian streamers are doubling down on price being the most important purchase criterion, followed by breadth of content available.
- Only 36 percent of respondents in Australia indicate they stream more compared to last year, a decline of 13 percentage points as compared to the 2022 study
- The gap between free online services and paid subscription services is starting to close, with free online services accounting for 33 percent of total streaming time (an increase of eight percentage points as compared to last year) and paid subscription services making up 49 percent
- The average number of owned subscriptions per respondent decreased 10 percent compared to last year
- Year-over-year, willingness-to-pay per subscription decreased by 25 percent in Australia
Sydney, July 12, 2023 -- The latest research from global consultancy Simon-Kucher into consumer streaming behavior and preferences reveals that the growth of streaming is slowing down. In their second annual Global Streaming Study, Simon-Kucher reveals that only 36 percent of Australian subscribers indicate they stream more compared to last year -- this is down 13 percentage points from the number of consumers who indicated their streaming habits were up year-over-year in 2022. The study also revealed the average number of owned subscriptions per respondent in Australia is 2.5; down 10 percent from last year.
“While streaming was on the rise over recent years, we are now seeing some evidence of saturation in the market – a broad variety of providers are fighting for the time and budgets of consumers,” said Lisa Jaeger, Partner and Global Head of Technology, Media & Telco at Simon-Kucher. “As consumers are becoming more and more price sensitive, cancellations will also become more likely unless service providers are able to meet consumer expectations and prove the value of their product.”
Streaming behaviors vary across content types, but are mostly unchanged compared to last year
As compared to last year, streaming of movies has remained constant – 75 percent of consumers spend more than two hours per week watching movies. With 76 percent for TV series and 38 percent for Live events (e.g. sports), both are significanty lower compared to last year (a decrease of ~seven percent for both).
Purchase drivers are holding steady but budgets are dropping
Year-over-year, purchase criteria are largely unchanged. Price is the most important purchase criterion, followed by breadth of content available. Opposing the global trend (decrease of four percentage points), the importance of frequency of new content is slightly up in Australia (increase of two percentage points) making it the fourth most important purchase criterion. Compared to last year, willingness-to-pay per subscription decreased by 25 percent on average in Australia indicating a trend of increasing price sensitivity for individual subscriptions. However, overall willingness-to-pay per month on streaming services remained stable.
In Australia, like in Singapore, Germany, the Netherlands, UK, and France, budgets are almost used up with very little room for price increases of existing services or to add new low-priced subscriptions. While in India, US, Brazil, Spain, and Sweden respondents have already exceeded their streaming budgets with existing subscriptions – so to add a new subscription, an existing one would likely be cancelled.
Subscription fatigue is on the rise
Among Australian survey respondents, 45 percent would cancel an existing subscription in favor of a new one and only 32 percent of respondents would not cancel an existing subscription, or make savings elsewhere when subscribing to a new streaming service. As compared to last year, consumers are increasingly inclined to cancel existing subscriptions (an increase of two percentage points), suggesting an increasing degree of market saturation.
Additionally, 34 percent of respondents cancelled a subscription within the last year and 39 percent intend to cancel one within the upcoming year. Overall, the average number of owned subscriptions per respondent in Australia decreased by 10 percent compared to last year. In an international context, China had the biggest drop in streaming subscriptions per respondent (a 43 percent decrease), while Brazil (no change) and Spain (a three percent increase) are the only countries that have not seen a decline in streaming subscriptions.
Complete study findings are available upon request, including country splits.
*About the Study: The Global Streaming Study 2023 was conducted during May 2023 by the global consultancy Simon-Kucher & Partners. More than 12,000 consumers from across 12 countries (Australia, Brazil, China, France, Germany, India, Netherlands, Singapore, Spain, Sweden, UK, US) were surveyed on their streaming behaviors and preferences.
For further information, please contact:
Maximilian Stengl
Email: maximilian.stengl@simon-kucher.com
About Simon-Kucher
Simon-Kucher is a global consultancy with more than 2,000 employees in 30 countries. Our sole focus is on unlocking better growth that drives measurable revenue and profit for our clients. We achieve this by optimizing every lever of their commercial strategy – product, price, innovation, marketing, and sales – based on deep insights into what customers want and value. With 37 years of experience in monetization topics of all kinds, we are regarded as the world’s leading pricing and growth specialist.
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