Streaming-Video Subscriptions Have Risen During COVID-19 — but So Has ‘Subscription Fatigue,’ Study Finds

Streaming Digital Media Trends - Deloitte
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Americans now subscribe to more streaming-video services than ever: The average U.S. consumer currently pays for four different services, up from three pre-COVID-19, per a new study from Deloitte.

But the quarantine-driven binge on subscription VOD may be short-lived — many people could cut back once coronavirus restrictions are lifted or because of economic hardship, per Deloitte’s analysis.

For the 14th annual edition of Deloitte’s Digital Media Trends study, the consulting and professional services firm conducted a pre-COVID-19 survey from December 2019-January 2020 and a second survey in May 2020 following the onset of the pandemic. About 80% of U.S. consumers now subscribe to at least one paid streaming video service, up from 73% in the pre-COVID-19 survey (and versus 69% in Deloitte’s study last year).

As more media providers join the SVOD fray, that’s putting pressure on content and pricing. And consumers are increasingly frustrated in trying to navigate the flood of streaming options, all while trying to manage costs. That growing degree of “subscription fatigue” may lead to increased cancellations, while also pushing more viewers to free, ad-supported streaming options, according to Kevin Westcott, vice chairman of Deloitte and U.S. telecom, media and entertainment leader.

“People have more time on their hands, and they’re trying new things,” he said. “But at the same time, we are seeing a significant amount of churn.” The coronavirus pandemic, Westcott added, “has accelerated the trends we have seen in our industry.”

Per Deloitte’s May survey, some consumers sign up for free trials, then cancel when the trial ends or after they finish a favorite series and switch services in search of fresh content.

Pre-pandemic, 20% of streaming video subscribers cancelled at least one service in the previous 12 months. Since the pandemic began, fully 17% of subscribers said they have already cancelled at least one service. The top reasons for canceling: high costs (36%) and expiring discounts or the end of free trials (35%). Note that Disney Plus recently pulled the plug on its seven-day free trial (coming just a few weeks before Lin-Manuel Miranda’s “Hamilton” movie is set to start streaming July 3).

SVOD churn promises get even more intense as the likes of Netflix, Hulu, Disney Plus, Amazon Prime Video, HBO Max, CBS All Access — and more — battle for share of consumers’ wallets. Deloitte’s survey found that 39% of American consumers reported a decrease in their household income since the pandemic began.

“With less money to spend, the competition for consumer attention and retention has never been fiercer,” said Westcott.

All of this points to an opportunity for free, ad-supported video streaming services to expand their audiences. During the pandemic, 47% of consumers said they used at least one free ad-supported streaming video service. The majority of U.S. consumers said they want access to cheaper, ad-supported streaming video options, both before (62%) and since the COVID-19 pandemic (65%).

“The industry can’t just keep adding new paid subscriptions,” said Westcott, pointing out that there are more than 300 individual subscription-video platforms in the U.S. alone.

Other findings from the Deloitte study:

  • Subscribers say they are drawn to streaming video services with a broad range of TV shows and movies (51%) and exclusive original or library content (45%).
  • 22% of consumers overall (30% of Gen Z and 36% of millennials) paid to stream a first-run movie during the pandemic. Of those who did, 90% said they would likely do so again. Among those who did not, 42% said the price was too high.
  • About one-third of consumers said they will not be comfortable attending live events for the next six months. There’s a significant generational split: 50% of millennials and 47% of Gen Z respondents said they would be willing to attend a sporting event in the next six months, versus 28% of boomers.
  • Video gaming has soared during COVID-19. Since the coronavirus crisis began, 48% of U.S. consumers have participated in some form of video gaming activity — with younger generations overindexing here (69% of millennials and 75% of Gen Z). Prior to COVID-19, 25% of consumers watched live-streamed and recorded video of others playing games (with around 50% of millennials and Gen Z). These numbers continue to hold during the pandemic, according to Deloitte.