The SVOD market is saturated and a growing number of subscribers are considering cutting back on subscriptions. Aluma Connected Media Insights show that 35% of customers think they spend too much on streaming services overall and would benefit from decreasing the number of subscriptions they hold.
The number of households who agree they spend too much for streaming has been steadily rising looking back to 2019 when only 12% of customers surveyed said they had more than necessary. In 2020, this number went up to 17%, then jumped to 24% in 2021 and 25% the following year.
In the same time frame, those who thought they had the right number of subscriptions spanned similar margins but fell to 60% this year, down from a high of 69% in 2020. Those open to spending more on streaming services fell significantly from 24% in 2019 to now just 5% in 2023.
“That only one-in-20 SVOD buyers are open to adding a new subscription service is the latest indicator that U.S. demand for services is largely exhausted,” said Michael Greeson, Founder and Principal Analyst at Aluma as reported by NextTV. “This does not mean mature SVOD providers will not add subscribers, only that such additions will be fewer, require more aggressive discounts, and be zero-sum purchases — that is, for every new service added, another must be canceled.”
Increases in streaming prices are one of the main driving forces behind customer concerns. Price hikes to drive up revenue is driving away subscribers, especially with more free ad-supported services being readily available.
Streaming services are also cutting back on investments toward new content or retaining licensing rights, especially during the writers’ and actors’ strikes as production is at a near standstill. Bundle packages are one way for streaming services to expand their audience and their content libraries while providing some perks for subscribers.
“Content owners that have long competed head to head with one another will engage in strategic bundling with competitors,” said Greeson. “This is not some kumbaya moment for the streaming industry, but a strategic necessity for SVOD operators, much as joining cable TV bundles was for large over-the-air broadcasters more than 50 years ago. It’s about survival in a hyper-competitive marketplace.”