In a new report, Hub Entertainment Research explains what (and how much) OTT consumers are willing to pay for, and which providers do they think deliver the best value?
In an era of over-supply of streaming services and entertainment options, it’s hard to decipher what viewers and consumers want and value, and how to stand out in this saturated market.
In its latest report, Hub Entertainment Research answers which distribution models do consumers find most valuable, and how do they prefer to pay for content?
First, according to the report, there’s little room to grow in getting consumers to pay more for TV and streaming subscriptions. Similar to prior years, people are tapped out on TV spending and say there’s little more room for them to spend above what they already are paying. As of this year, people are spending an average of 82 dollars a month on TV subscriptions and are not willing to go any higher than US$ 87 on average.
In the landscape of myriad paid services, consumers increasingly perceive more value in what free services with ads (FAST) have to offer. In this sense, 34% of respondents classified FAST services as “Excellent”, while only 22% did so for SVOD.
However, those paying extra for Among users of each ad-free services say they are more likely to keep that service than cheaper ad-supported plans. The act of paying more potentially increases perceived loyalty to justify that expense.
Moreover, price is a top driver that matters most when evaluating a service. But specific content drivers like new theatrical movies, full seasons of TV shows, original/exclusive shows and live sports can motivate unique audiences.
About half of viewers churn in and out of services. There’s “Quick” churners, those who say they have signed up for a new platform and then dropped it within 6 months of signing up; and “Serial” churners, those who sign up, cancel, then re-subscribe to the same service (so that they are only paying when there is something they want to watch).
In this regard, canceling is as much about a perceived lack of shows to watch, or just having signed up for one show, as it is about saving money.
On the other hand, bundling reduces “Revolving Door” churn, as canceling bundled services is clearly harder to do than canceling individual ones. The bundle’s upside of broader content access that solves for gaps in individual services delivers a win-win for viewers and streamers.
