As the growth of streaming slows, service providers need to leverage their opportunities wisely
Ahead of Netflix’s announcement of its second quarter financial results later this month, Simon-Kucher’s latest study shows that streamers are doubling down on price being the most important purchase criterion, followed by breadth of content available
- Simon-Kucher surveyed more than 1,000 consumers from the United States on their streaming behaviors and preferences
- Only 42 percent of respondents indicate they stream more compared to last year, a decline of 14 percentage points as compared to the 2022 study
- The gap between free online services and paid subscription services is closing, with free online services accounting for 33 percent of total streaming time (an increase of 4 percentage points as compared to last year) and paid subscription services making up 41 percent
- The average number of owned subscriptions per respondent decreased 13 percent compared to last year
- Year-over-year, willingness-to-pay per subscription decreased by 25 percent on average
[San Francisco, US July 13, 2023] – The latest research from global consultancy Simon-Kucher into consumer streaming behavior and preferences reveals that the growth of streaming is slowing. In their second annual Streaming Study, the US results to the Global study reveals that only 42 percent of respondents indicate they stream more compared to last year – this is down 14 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 is 3.2; down 13 percent from last year.
“While streaming was on the rise in 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 largely unchanged compared to last year
As compared to last year, streaming of both movies and series has remained constant – 74 percent of consumers spend more than two hours per week watching movies, while 81 percent spend more than two hours per week watching TV series. Live events (e.g. sports) is significantly lower at only 30 percent of consumers spending more than two hours per week watching these.
“While providers have been actively pushing out new and unique content, consumers are not increasing their consumption, resulting in a more prominent ‘fight’ for time,” says Isis Gutierrez, Director at Simon-Kucker.
Purchase drivers are holding steady but budgets are dropping
Year-over-year, purchase criteria are largely unchanged. Price is the most important purchase criterion at 81 percent, up 9 percentage points when compared to last year, indicating a trend of increasing price sensitivity, followed by breadth of content available. The importance of frequency of new content is slightly down by 1 percent, potentially due to the amount of new players and abundance of content on the market. Compared to last year, willingness-to-pay per subscription decreased by 25 percent on average, while overall willingness-to-pay per month on streaming services decreased by 13 percent on average, further emphasizing price sensitivity in the market.
While the average number of owned subscriptions decreased to 3.2, only 31 percent indicated they would cancel an existing subscription in favor of a new one. Consumers are still showing strong appetites for content, and those streaming providers demonstrating value will continue to maintain their position.
Michelle Verwest, Partner at Simon-Kucher added “as streaming customers’ budgets continue to tighten, their choices become much less about volume and newness, and more about value for money. Providers that are responsive to these needs of the consumer, and position themselves with strategic pricing to match their content, will be poised for growth in the long run.”
Complete study findings are available upon request.
*About the Study: The Global Streaming Study 2023 was conducted during May 2023 by the global consultancy Simon-Kucher. 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:
Niki Irby
Email: niki.irby@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.