The streaming industry has undergone a remarkable transformation in recent years, impacting consumer habits and presenting significant challenges for streaming providers. As trends continue to shape the market, securing consumer loyalty becomes critical for companies seeking sustained growth. How can streaming providers effectively retain existing subscribers while attracting new ones in this competitive landscape? In this blog, we will explore current consumer trends and insights from the US results from our recent streaming study to deliver strategies for securing consumer loyalty and ensuring long-term success.
The Streaming Dilemma: The Decline in Streaming
The introduction of streaming services revolutionized how audiences consume entertainment, offering a vast library of content at their fingertips. Consumers were initially all-in, excited by the convenience and variety of options, resulting in a surge in streaming time. However, an evolution in behavior was inevitable, and despite the availability of extensive content, people are no longer inclined to increase their streaming hours. The number of consumers indicating they streamed “more” than in the previous year has declined by 14 points.
So, what are streaming consumers watching? Films and TV series remain the favored choices, with our study revealing that 74% of consumers spend more than two hours per week watching films and 81% devote the same amount of time to TV series. On the other hand, live events have notably less audience engagement, with only 30% of consumers stating they devote over two hours to viewing them. As consumers become more selective with their streaming time, providers face an increasing challenge to retain their audience's attention.
Strategies for Streaming Providers: Content
In a fiercely competitive streaming industry with continuous new arrivals, incumbent platforms must focus on retaining their current share of viewers. To achieve this, streaming providers need to ensure continued engagement and satisfaction among their target audience. According to our Streaming Study, the breadth of content available and the frequency of new content added are crucial factors influencing customer purchase decisions, ranking second and third in importance after price.
Today's consumers seek value beyond just affordability, and the depth and variety of content offerings play a pivotal role in attracting and retaining subscribers. Streaming providers that deliver on value will stay ahead in the market and adapt to the evolving demands of consumers.
Consumer Spending Habits: The Squeeze on Streaming Providers
Over the past year, consumers have exhibited a significant shift in price sensitivity with respect to subscription budgets. The average consumer’s willingness-to-pay (WTP) per subscription has seen a noticeable reduction of 25%, indicating a more critical assessment of each individual service. Instead of freely subscribing to multiple platforms, viewers are now scrutinizing the value they derive from each service.
When we consider a consumer’s total monthly budget for streaming services, there is a similar downward trend. The overall WTP has dropped to $35 per month, a 13% decrease from last year. These trends underscore the necessity for streaming providers to strategize and adapt by offering compelling content and value propositions to keep their audience’s attention in an increasingly competitive market.
However, there are implications for streaming providers as consumer budgets tighten. One in three respondents parted ways with a streaming service, and nearly half (46%) of those who cancelled a subscription last year did so to save money. Looking ahead, we expect the figure to increase slightly, with 36% of respondents planning to do the same in the upcoming year.
The high and lows of consumer preference and spending behavior can leave streaming providers in a strategy whirlwind without a clear vision for the future. Only with a comprehensive approach to a pricing and growth strategy will providers be able to confidently navigate consumer volatility.
Strategic Pricing as a Response to Consumer Price Sensitivity
Streaming providers cannot afford to overlook the impact of price on their consumers’ decisions to subscribe. Whether it's attracting new subscribers or retaining current ones, offering the right content at the right price point is critical. Streaming services must offer diverse subscription tiers to ensure wide accessibility, customer appeal, and provide value for a range of budgets.
- Lower-priced plans will attract budget-conscious users and provide an opt-down option for increasingly price-conscious consumers, further enhancing customer retention.
- Premium plans will cater to higher budget customers willing to pay more for premium features or exclusive content.
By striking this balance, streaming providers foster a positive user experience, leading to greater loyalty and, ultimately, success and growth in a competitive market.
The streaming industry's landscape is constantly evolving, and consumer habits are changing. To thrive in this dynamic environment, streaming providers must diversify their content offerings, fine-tune their content strategies, and implement strategic pricing approaches to cater to varying consumer budgets. No single strategy will work for the unique offerings and audiences of the diverse streaming providers – from industry giants to niche platforms. Steaming providers need to carve their place in the industry through a carefully crafted strategy.
Our expert utilizes their deep understanding of the industry, matched with data-powered insights to ensure the solution fits their needs. Connect with us today and position your business for long-term growth.
Isis Gutierrez, Director