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 12,000 consumers from across 12 countries around the world on their streaming behaviors and preferences
- Only 40 percent of respondents globally indicate they stream more compared to last year, a decline of nine 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 36 percent of total streaming time (an increase of seven percentage points as compared to last year) and paid subscription services making up 41 percent
- The average number of owned subscriptions per respondent decreased 14 percent compared to last year
- Year-over-year, willingness-to-pay per subscription decreased by 27 percent on average
[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 40 percent of respondents indicate they stream more compared to last year -- this is down nine 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 globally is 2.4; down 14 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 largely unchanged compared to last year
As compared to last year, streaming of both movies and series has remained constant – 78 percent of consumers spend more than two hours per week watching movies, while 70 percent spend more than two hours per week watching TV series. Live events (e.g. sports) is significantly lower at only 41 percent of consumer spending more than two hours per week watching these.
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. The importance of frequency of new content is down four percentage points, potentially due to the amount of new players and content on the market. When compared to last year, price is slightly more important (an increase of four percentage points), indicating a trend of increasing price sensitivity. Compared to last year, willingness-to-pay per subscription decreased by 27 percent on average, while overall willingness-to-pay per month on streaming services decreased by eight percent on average.
In India, US, Brazil, Spain, and Sweden respondents have already exceeded their streaming budgets with existing subscriptions – so to add a new subscriptoin, an existing one would likely be cancelled. While in Singapore, Australia, 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.
Subscription fatigue is on the rise
Among survey respondents, 37 percent would cancel an existing subscription in favor of a new one and only 38 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 three percentage points), suggesting an increasing degree of market saturation.
Additionally, approximately 30 percent of respondents cancelled a subscription within the last year and 40 percent intend to cancel one within the upcoming year. Overall, the average number of owned subscriptions per respondent decreased by 14 percent compared to last year -- 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.
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.