Consumers' Appetites for New Streaming Services May Be on the Wane
Have consumers run out of patience, time, and money for OTT streaming services? A new report from Visual Objects suggests that may be the case. The report, based on a survey conducted by Manifest, found that 76% of consumers pay for 1 to 3 streaming services, and only 16% pay for more.
The survey found that 26% of consumers pay for only one streaming service, while 50% pay for 2 to 3. "It is essential for streaming companies to be in the top 3 most popular services," writes author Emily Clark. Once you figure in Netflix, Amazon Video, and Hulu, that doesn't leave much room for upstarts—something Quibi discovered quickly after its April launch.
The survey also found that 78% of people pay $50 or less per month on streaming services. 15% pay $10 or less, 39% pay between $11 and $25, and 24% pay $26 to $50. Only 11% pay between $51 and $75, and 9% pay more than $76 per month.
"Considering the price point, new streaming services are going to have a tough time competing with the three most popular platforms: Netflix, Hulu (owned by Disney), and Amazon Prime," Clark writes. She notes that Disney+ has gained 28.6 million subscribers since its launch in November 2019, while Apple TV+ has gotten more than 10 million customers to sign up to the service's 12-month free trial. That's only 10% of Apple's customer base.
Quibi spent $1.8 billion on launching its mobile-only "quick bites" video service, but has already lost almost two-thirds of the consumers who signed up for a free 90-day trial.
The survey also found that, despite the success of early digital movie releases like Trolls World Tour, consumers aren't willing to pay movie theater ticket prices for most online films. 19% said they would pay if it was a lower price than a movie ticket, while 18% said they would only watch if it was part of a paid subscription. (The survey doesn't break the cost of movie tickets down per viewer—at $20 to stream for 48 hours, films like Trolls World Tour are cheaper for a family of four to watch online than the cost of four movie tickets, but higher than the cost of a movie ticket for a solo viewing.)
Visual Objects is a portfolio website that showcases the work of creative agencies in the digital media space. The Visual Objects/Manifest survey asked 401 people across the U.S. about their streaming habits.
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