Movies, television, and other forms of video entertainment are more accessible than ever before, but consumers are watching in dramatically different ways than they once did. According to Bloomberg, the number of traditional TV subscribers hit its peak in 2012 and has been on a steady decline ever since, falling from 100 million to 95 million in just six short years. Instead, more and more viewers have flocked to online streaming services like Netflix, Hulu, and Amazon Video.
However, lately, it’s become much tougher for new streaming providers to achieve success, especially those with a very specific content focus. The NBCUniversal-owned comedy network Seeso only reached a few hundred thousand subscribers and was shuttered less than two years after its launch; WarnerMedia also recently shut down three of its most niche channels to make way for a larger service beginning in 2019.
So just how immense are the odds currently stacked against new streaming services? To find out, Suzy targeted 1,000 millennials between the ages of 22 and 37 – who are known to value Netflix more than traditional broadcast cable, but who overall have lower earnings and less wealth than previous generations – to get a read on their current streaming spending habits.
Here’s what we found:
Although consumers are willing to pay for streaming content, they are still fairly selective about the services they choose; about 56% of those polled pay for only one to two different streaming video services at a time. Only 6% of those polled pay for five or more services, which is less than the percentage of those who don’t pay for any services at all.
Those who don’t subscribe to any video streaming services claim that they prefer the free content they find on websites like YouTube or Twitch, which suggests that new streaming subscription services aren’t just facing off against traditional television for their customers’ attention – they’re also competing against the entire internet.
We then retargeted current streaming subscribers to ask what they consider when signing up for a new service. It’s probably no small surprise that most respondents cited cost as the biggest factor; however, they’re about as equally interested in the quality of the programming as they are in the range of that programming.
This is further demonstrated in how Suzy’s on-demand consumer panel responded to hypothetical questions about the kinds of programming offered on streaming services. Many seemed receptive to the idea of joining a new service to watch a single television series, but most wanted to weigh other factors in making that decision – including how much more was available than just that one show.
Companies hoping to compete in the streaming video market must ensure their monthly costs are low enough that their target audience – people who already feel comfortable paying for streaming services – can justify an additional purchase to the one or two subscriptions they currently use. Furthermore, although a buzzworthy new series might attract enough attention to give a new service a boost, companies ultimately need a wider range of content to retain those same viewers for longer periods of time.
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