The streaming market continues to heat up with pure-play companies, launches from media giants and a highly competitive market for sports rights.
The introduction of ad-supported plans from Netflix Inc NFLX and Walt Disney Co DIS has also put pressure on streaming competitors.
A new survey showed Americans were spending more than they would like monthly on subscriptions.
What Happened: All eyes could be on the streaming market Tuesday with its leader Netflix scheduled to report first-quarter financial results. The report will come after the company posted a gain of 7.7 million subscribers in the fourth quarter, beatings analysts’ estimates.
As Netflix and others fight for the wallets of streamers and their content consumption, a new survey shows exactly how much is spent monthly by Americans.
The Deloitte Digital Media Trends report revealed Americans spent an average of $48 a month on video streaming services, as reported by Variety.
What could be most troublesome for streaming platform companies were the results of the survey. Of those surveyed, around half said that they “pay too much” for streaming services. A third of those polled said they intended to lower the number of video subscriptions they have.
“When the price of fuel, food and housing go up, people are rethinking their discretionary spending, Deloitte’s Kevin Westcott said.
In the survey, the number of streaming platforms subscriptions stayed steady from past years at an average of four. This was the first time the survey asked for a dollar figure on video subscription spending.
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Why It’s Important: The changes might already be happening for consumers, which could be bad news for streaming companies.
In the survey, 47% of Americans said they have made at least one change to entertainment subscriptions, which could mean cutting the plan or moving to a lower ad-supported plan instead.
Churn in the survey was 44%, counting those who cancelled a video subscription in the last six months. This came in higher than the 37% reported in the Deloitte report from 2022. Gen Z and millennials reported cancelling subscriptions at rates of 57% and 62%, respectively, in the survey.
Trending shows and original hits could be even more important moving forward. The survey found that 54% of Americans often watch a show or movie based on reading about it on social media. Among millennials and Gen Z consumers, this figure was closer to 75%.
The results from the Deloitte survey fall in line with the recently reported Benzinga and Dig Insights Economic Sentiment tracker which found that 56% of those surveyed were considering cancelling subscriptions to save money.
The results of both surveys come as inflation has risen and consumers are failing to keep up with rising costs. The Benzinga and Dig Insights Economic Sentiment tracker found that 40% of Americans surveyed were taking on additional debt to pay monthly bills.
When asked if they could keep only one streaming subscription after the cost cuts, here were the results from the Benzinga and Dig Insights Economic Sentiment trackers:
- Netflix: 29%
- Amazon Prime Video AMZN: 13%
- Hulu: 11%
- YouTube from Alphabet Inc GOOGGOOGL: 8%
- HBO Max from Warner Bros. Discovery WBD: 8%
- Disney+: 7%
- Paramount+ from Paramount Global PARA: 7%
- Peacock from Comcast Corporation CMCSA
- AppleTV+ AAPL: 3%
- Sling: 2%
- Crave: 1%
- None of the Above: 9%
The recent surveys showed streaming platforms may struggle to gain subscribers as consumers have too many options and are spending more than they want monthly on plans.
This could mean a large emphasis on sports, live content and original content that are differentiating factors. Ad-supported and cheaper-priced tiers could also gain momentum in the current climate.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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