Media companies have pivoted to direct-to-consumer platforms to capture additional subscription and advertising revenue in the highly competitive streaming stocks sector.
The bad news is consumers are fed up with the amount they pay monthly and aren't ready to embrace additional price increases.
What Happened: Streaming giant Netflix Inc NFLX ended the fourth quarter with 260.28 million global paid members.
The company is looking for more ways to add subscribers and monetize its ad-supported platform while also increasing prices.
The new Digital Media Trends report from Deloitte shows that US consumers are paying an average of $61 per month for four subscription video-on-demand (SVOD) platforms.
The survey found that 36% of U.S. consumers said the content on SVOD isn't worth the money. The survey also found that 46% of households subscribe to at least one ad-supported tier.
The bad news for streaming companies was the survey results about canceling subscriptions. The survey found that 40% of households have canceled at least one paid SVOD in the past six months. This marked a slight improvement from 44% reported in last year's Deloitte report but is still nearly half of all respondents.
In the survey, 48% of households said they would cancel their favorite SVOD if the subscription price went up by $5 or more per month. Gen Z users had the highest percent vote on canceling over $5 with 55% saying yes. Boomers were second-highest among age demographics at 48%, followed by Gen X (46%) and millennials (45%).
Related Link: Netflix ‘The Ultimate Beneficiary’ Of Streaming Shift: Analyst Highlights Subscription Price Increase As Big Catalyst
Why It's Important: Netflix has already hinted at price increases and other streaming platforms could be thinking the same.
The survey reveals a delicate balance between streaming platforms having enough content that is worth the money and charging the right price.
Consumers appear to be maxed out at $61 per month in average streaming spending and not ready to spend more.
The survey shows that nearly half of streaming subscribers would cancel their favorite platform if a $5 price increase was announced.
With companies pushing for ad-supported platforms as, monetization of those plans could become more valuable than increasing prices on regular plans and potentially help with churn.
Streaming platforms may also push smaller price increases through to not lose customers.
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