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Source: www.tvtechnology.com, October 2021

A new survey from Deloitte shows that consumers want more than just entertainment and that media companies face tough competition from social media and gaming

NEW YORK—Nearly two years into the pandemic, a new survey from Deloitte shows that consumers are spending more time with in-home media and that media companies face some tough competition from interactive social media and gaming experiences that can provide consumers with the social connections they crave.

“It’s clear people still want to enjoy socializing with friends and family, even if that means the experience is online and the interaction is from within their homes,” explained Jana Arbanas, vice chairman, Deloitte LLP and U.S. telecom, media and entertainment sector leader. “Streaming video in its current form doesn’t satisfy this social desire, so to meet this need, consumers are spending increasingly more time on other forms of online entertainment. Given this reality, streaming companies need to evolve their offerings into connected social experiences in order to keep subscribers interested and engaged, ultimately positioning their businesses for future growth amidst changing behaviors.”

The “Deloitte Digital Media Trends Fall Pulse Survey” revealed that 84% of consumers are spending more time on online entertainment at home, compared with in-person entertainment outside the home and that a similar percentage (82%) say they are concerned about COVID-19 variants, and that’s likely keeping people indoors and online.

While this has been good for media companies launching streaming services, the survey also found that consumers have a wide array of offerings competing for their attention and that churn remains a major problem.

Boomers and Gen X still rank “watching TV shows or movies at home” as their favorite entertainment activity while Gen Z still rank “playing video games” as their preferred form of entertainment, the report found.

About 65% of respondents are frequent gamers, playing at least once a week; on average, these frequent gamers play for around 12 hours a week.

Sixty-five percent (65%) of consumers are engaging with at least one social media service several times a day.

In this landscape, churn is a growing problem. Almost half of millennials (47%) and 34% of Gen Z cancelled and then resubscribed to the same streaming video service later that same year.

The top reason consumers cancelled a paid streaming video on demand (SVOD) service was due to high cost followed by the fact they finished the show they signed up to watch.

About 65% of consumers watch free ad-supported video services.

The report stressed that the survey data shows that the “old normal” patterns of consumer behavior were not returning and that streaming video providers were finding it harder than ever to keep subscribers as people — especially younger generations — are managing costs by adopting ad-supported options, looking for discounts and bundles, and moving on and off services to satisfy their content needs.

This, Deloitte noted, could be ushering in a permanent shift in entertainment, where it’s not just about streaming, or the number of subscribers, but also about providing more social and interactive experiences to reduce churn.

“We’re seeing an important shift in what consumers are paying attention to and how they are choosing to engage and be entertained,” said Kevin Westcott, vice chairman, Deloitte LLP and U.S. technology, media and telecom leader. “While streaming video will continue to gain momentum, especially with leading services now pursuing global markets, these companies will also need to address churn and retention among diverse segments in different markets, and shift from merely measuring subscribers to understanding how to unlock the lifetime value within their customer bases. It will serve them well in the future to develop growth strategies that include both social video and social gaming, whether through partnerships, acquisitions, or simply establishing a really effective social media department.”

Other key day points included:

  • About half of consumers (48%) say they spend more time on online entertainment versus six months ago.
  • Boomers and Gen X still rank watching TV shows or movies at home as their favorite entertainment activity.
  • Gen Z, meanwhile, still rank playing video games as their preferred form of entertainment.
  • Everyone younger than Boomers, especially Gen Zs and millennials, have been listening to music more than they were six months ago.
  • More premium and ad-supported services have launched, giving U.S. consumers additional options for watching new original content, and accessing a broad content library. The survey revealed that consumers are getting better at developing strategies to access this content while keeping their costs low.
  • Eighty-four percent (84%) of respondents now pay for a SVOD service; the average household has four subscriptions — largely unchanged during the past year.
  • The churn rate — the number of people who have cancelled, or both added and cancelled, a paid SVOD service — has remained stable at about 38%, although it varies from service to service.
  • The top reason consumers cancelled a paid SVOD service was due to high cost followed by the fact they finished the show they signed up to watch.
  • Many streaming video subscribers say they actively manage costs in some way, either by looking for deals or promotions, bundles, using friends’ or family members’ accounts, and other strategies.
  • Led by cost-sensitive and savvy millennials and Gen Zs, 65% of respondents reported using free ad-supported video services.
  • About 90% of respondents cited using at least one social media service, and the average person uses five different services. This number increases to seven for Gen Zs and millennials, with about a quarter of each using 10 or more different services.
  • Sixty-five percent (65%) of consumers are engaging with at least one of these services several times a day.
  • The top reasons for using social media are staying connected to friends and family (51%) and staying up to date on news and current events (31%). Discovering new content also ranked highly: 21% use social media to discover new video content, and 16% use it to discover new music.
  • While a third of respondents say they are watching more video on paid streaming video services than they were six months ago, nearly as many say they are watching more video on social media and live streaming services.
  • Forty-four percent (44%) of consumers follow an influencer on social media. Among consumers who follow an influencer, the top reason is liking the content they produce (53%). Other top reasons include relating to the influencer (35%), admiring them (29%) and liking the products they promote (29%).
  • Roughly 4 in 10 U.S. respondents say that they have seen a product on social media and gone to the retailer’s website to buy it or clicked on an advertisement that led to a purchase.
  • Thirty-one percent (31%) of respondents have made a purchase directly on a social media service. Younger consumers are more likely to find recommendations from influencers important to their purchasing decisions.

For additional details on the findings or to listen to an audio file, visit here.