Photo by AshTproductions/Shutterstock
By ERIK GRUENWEDEL
Source: www.mediaplaynews.com, September 2023
Nearly 40% of surveyed streaming video subscribers are considering canceling service within the next year, even before considering price increases. Another 16% would consider canceling service if the monthly fee increased no more than 10%. That’s according to new data from industry consultant Simon-Kucher, which conducted an online survey of 12,000 consumers across 12 countries (Australia, Brazil, China, France, Germany, India, Netherlands, Singapore, Spain, Sweden, United Kingdom and United States) on their streaming behaviors and preferences.
Most survey respondents expect streaming prices to rise in the next year, particularly for Netflix (71%), but also for Prime Video (69%), Now TV (66%), Apple TV+ (64%) and Disney+ (60%). Disney+ and Netflix are the only SVOD services for which subscribers perceive pricing reflective of the product value. Apple TV+ apparently falls on the opposite end of the scale.
The data suggests that the current perceived price-value positioning leaves little headroom for straightforward price increases among SVOD platforms, according to the report. Price increases without also increasing the perceived product value could be costly for both global and local streaming providers, leading to risks of cancelations in a competitive market.
“With subscribers feeling that many providers are not delivering value for money, it’s more difficult than ever before to raise prices without adding real value to the offering — this is just as true for the U.K.’s local players as it is for the streaming giants,” Greg Harwood, partner at Simon-Kucher, said in a statement.
Even though consumers are anticipating more price increases in the next year, hiking prices up further will significantly increase the number of subscribers considering leaving, which is why even small increases should be justified with clearly communicated value enhancements, according to the report. While respondent sentiments vary between age groups, combining streaming and gaming and adding social features look to be promising future value-adds, according to the report.
Among the global SVOD services, Apple TV+ users are by far the most likely to consider leaving, with 37% indicating that they are likely to cancel their subscriptions within the next year — likely due to last year’s price hikes. The service is seen as offering poorer value for the money than its competition, according to the report. As such, Apple TV+ has approximately twice the expected churn compared to the other major players. Netflix and Prime Video fare better, with Netflix having 16% and Amazon having 19% of users considering canceling within the next year, while Disney+ sits at 24%.
Simon-Kucher found that the projected subscription cancellations are driven by perceived differences on the most important purchase criteria.
Overall, Prime Video is perceived to have the cheapest price compared to competition; Apple TV+ is perceived as most expensive for what it offers. Disney+ is perceived as the market leader in terms of broadness and frequency of new content added to the platform.
Disney+ is also perceived to have the most unique content, likely due to its exclusive rights to Marvel and “Star Wars” content. When looking across global players, Disney+ performs strongest, closely followed by Netflix, while Apple TV+ performs the worst.
Combining streaming and video gaming could be a promising future value-add, especially for streamers under the age of 40 (41% interested in streaming/gaming crossover, but only 14% for respondents aged over 40). Of the younger subscribers that are interested in the new feature, 44% said they would be willing to pay a monthly premium for combined streaming video/gaming functionality.
Separately, 27% 0f U.K. respondents said they would be interested in a social media “Watch Together” feature allowing multiple SVOD accounts in different locations to synchronize and play content at the same time, opening new avenues for streaming monetization.
