June 23, 2020
Eighty percent of U.S. consumers said their households now subscribe to at least one paid streaming video service, up from 73% pre-COVID-19, according to Deloitte surveys, and subscribers now have an average of four paid streaming video subscriptions, up from three pre-COVID-19.
Deloitte conducted a pre-COVID-19 survey December 2019 to January 2020 and a second survey in May following the onset of the pandemic.
Pre-pandemic, 27% of U.S. consumers said they planned to add a new streaming video service in the coming year; since COVID-19, 32% said they have added at least one new paid streaming video service.
In perhaps good news for premium VOD, 22% of consumers — 30% of Gen Z and 36% of Millennials — paid to watch a first-run movie on a streaming video service during the pandemic. Of those who did, 90% said they would likely do so again. Of those who did not, 42% of consumers said it was too expensive.
Other findings include:
- Nearly 70% of Boomers now have a paid streaming video subscription.
- For nearly a quarter of subscribers, a free or discounted rate was a big factor in choosing a paid streaming video service.
- Subscribers are drawn to streaming video services with a broad range of shows and movies (51%) and content they can’t get anywhere else (45%) — both originals and old favorites.
- In the earlier survey, 20% of streaming video subscribers canceled at least one service in the past year. Since the pandemic began, 17% of subscribers have already cancelled a service.
- High costs (36%) and expiring discounts or free trials (35%) were cited as the top reasons for cancellation.
“To win subscribers rapidly, many streaming video services are offering low introductory rates and free trials,” Dr. Jeff Loucks, executive director of Deloitte Center for Technology, Media and Telecommunications, Deloitte LLP, said in a statement. “But with cheap trials and easy cancellations, consumers can binge watch their favorite shows, drop the subscription, and then return when the next season launches. Since the COVID-19 pandemic began, streaming services have attracted more subscribers than ever. The biggest challenge for providers will likely be to retain customers once their series is over and the full price kicks in. Free ad-supported streaming could gain market share from paid services as budgets tighten.”
During the pandemic, nearly half (47%) of consumers cited using at least one free ad-supported streaming video service. More U.S. consumers want access to cheaper, ad-supported streaming video options, both before (62%) and since the COVID-19 pandemic (65%), while 35% of consumers don’t want ads and will pay to avoid them. Gen Z and Millennials are more likely than older generations to prefer the subscription-only model they grew up with; Boomers and Matures like the ad-only option that closely resembles TV.
Also during the pandemic, 38% of consumers said they have tried a new digital activity or subscription for the first time. The most popular activities were viewing live streamed events and watching video with others through a social platform, Web application, or video conference. More than two-thirds of consumers said they are likely to continue their new activity or subscription.