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.

La entrada Analysis: Which OTT Models Are Most Valuable for Consumers? se publicó primero en TTV News.

New platforms, ad-supported tiers, FAST channels… the OTT landscape is becoming more complex and users are shifting accordingly. Which models are prevailing? Have consumers reached their peak when it comes to subscriptions?

As streamers explore their business models and experiment with their offers, the OTT landscape continues to evolve. The scenario has become more complex recently, as platforms have added ad-supported tiers, raised their fees, and consolidated corporate services.

In addition, perks such as password sharing or content exclusivity are starting to be eroded, in addition to increased competition for SVODs as seemingly every media company and TV manufacturer has brought forth a FAST.

On top of this, there’s the economic factors at play, as inflation and worries about the economy continue to bother consumers.

So, in this notably complicated scenario, how do platforms stand in the eyes of today’s consumers? Are they saturated and have we reached the so called “peak TV” subscriptions?

A new report from Hub Research titled Monetization of Video indicates that almost half (43%) of US consumers say they already have as many subscriptions as they can use. The rest are either below their maximum, or they don’t have a maximum number in mind

Those already at their limit are using more than 7 different TV sources, somewhat more than viewers who say they don’t have a maximum number in mind. The 35% who say they have a limit but haven’t yet reached it say they would top out 7 platforms.

In addition, 44% of viewers say they are spending more on TV than they were a year ago, compared with only 35% in 2020.

The FAST Revolution and Ad-Supported Tiers

While a couple of years ago, FAST channels were considered to be a complement or an added perk to traditional TV platforms, the industry has now become a go-to when it comes to finding entertainment, as more and more groups are launching their own FAST channels.

According to the report, about 40% of Tubi or Pluto users give them the highest value rating. No doubt the fact they’re free helps, but growing investment in FAST content and user experience will continue to move the needle as well.

Yet, ad-based options to existing services are not always all that valuable for consumers. With tiered plans, each user “opts in” to the experience they receive: no one has to compromise. Therefore, while some platforms are perceived as more valuable than others, the ad-free and ad-supported versions of each one perform about the same.

The problem with churn

In this context of multiple platforms, “revolving door” churn is now the norm. Almost half of viewers say they have signed up for a new platform and then dropped it shortly thereafter. 42% have canceled at least one TV subscription within 6 months of signing up.

This churn is even more common among key segments. As well over half of Gen Z viewers and those with kids have cancelled a subscription within 6 months of signing up.

In addition, the highest spending viewers are more likely to engage in short term churn. The more paid TV subscriptions you have, the more likely you are to sign up for a new one and then cancel shortly thereafter.

La entrada Report: Have We Reached “Peak Subscriptions” in the Streaming World? se publicó primero en TTV News.

Focused on competing against each other, streaming platforms actually have many more obstacles in the fight to capture users’ attention during their leisure time, with social media, gaming, podcasts and many more options also on the table. So what makes a service a “must-have” for consumers?

Already established as one of the go-to sources of entertainment, OTT platforms have become part of many household’s daily routine and an integral part of their lives.

According to a new report from Hub Entertainment Research, the average number of video streaming service subscriptions per user has increased 51% in the US since the beginning of 2019.

In this scenario, many experts and analysts have devoted time to studying the increasing competition between streaming platforms, and the different models and strategies they should use to prevail in the so-called “streaming wars”.

However, streaming platforms musn’t only think of each other as competitors, but rather fight for a spot among users’ overall time devoted to leisure and entertainment, which spans far beyond just TV.

“Many think of the streaming wars as waged between video providers. But the set of providers competing for the same disposable time is much bigger”, says HBR’s report, titled Battle Royal: Winning Share of Mind in the Subscription Economy.

Surveying over 3000 US consumers ages 18 to 74, the researcher found that, across categories, the average household uses 12.5 different sources of entertainment; a number which increases to 15.5 among people ages 18-34, and to 16.4 in households with kids.

But, out of those 12.5 sources of entertainment, only half (6.2) are considered to be “must-haves” by consumers.

So what makes services stand out from the rest? Is it price? Availability? Or, as many proclaim, original content and unique offers? Well, the latter, for the most part. According to the report, “platforms for which there is no easy substitute, like Crunchyroll or YouTube, are more likely to be must-haves”.

First in line is Spotify, which 75% of users described as a “must-have”, followed by YouTube with 69%, Netflix with 68%, Crunchyroll with 67%, StadiaPro with 67%, XBox Live with 66% and Funimation with 65%.

In addition, as they say, there’s a time and a place for everything, and viewers also choose, and use, sources for specific scenarios. For instance, the report indicates that social media rules at 30 minutes or less, while anything over an hour will be devoted to streaming.

In this scenario, users claim to use social media as a means for “killing time”, while streaming is the go-to for “more immersive entertainment”.

Lastly, the report indicates that bundling breeds attachment, and that more consumers are likely to subscribe to services that offer several packages in one, such as Amazon, when combined with Prime Video, Prime Gaming or Amazon Music.

So which are the main takeaways for platforms and providers competing in the new overcrowded entertainment industry? First, that “entertainment” means a lot more that just video. Second, that consumers use lots of sources of entertainment, but only about half are really important. Third, platforms with no easy substitute are more resilient. Fourth, that bundling is a pathway to being considered a given. And lastly, that leveraging IP across categories is a big opportunity.

The full report can be found here.

La entrada The Keys to Standing Out in the Entertainment Market se publicó primero en TTV News.