Paid streaming services are facing challenges. Churn is high, especially among younger people, and younger generations, especially Gen Z, actually prefer playing video games to watching video and spend a lot of time watching user-generated content rather than TV shows and movies.
That’s according to Deloitte’s 16th annual digital media trends survey. The U.S. survey was fielded by an independent research firm in December 2021 and employed an online methodology among 2,000 U.S. consumers. All data was weighted back to the most recent census data to give a representative view of consumer sentiment and behaviors. The survey was also fielded in the United Kingdom, Germany, Brazil and Japan in December 2021 and January 2022. All data from the global markets was weighted to be nationally representative.
The U.S. paid streaming service churn rate averaged 37%, with 33% of respondents both adding and canceling a service and 4% canceling a service in the past six months. The churn rate was even higher among Gen Z and Millennials, with more than half of those respondents either canceling or canceling and adding paid services in the past six months. The trend also held true globally, with average churn in the international territories surveyed at 30% and younger generations more likely to move in and out of services.
While access to original content (39%) and a broad range of content (38%) were the top two reasons U.S. consumers said they were subscribing to paid SVOD services, U.S. subscribers said they’re canceling paid SVOD services due to cost (41%), price increases (30%) and lack of new content (30%).
While older generations said they prefer watching TV and movies at home, Gen Z respondents preferred video games as their favorite form of digital entertainment. About four in 10 (41%) U.S. consumers said they spend more time watching user-generated video content than they do TV shows and movies on video streaming services — a sentiment that increased to around 60% for Gen Zs and Millennials.
In the United States, 81% of social media users said they use social media services at least daily and 59% said they use these services several times a day, with younger generations (including Gen Z, Millennial, and Gen X) leading the pack on social media usage.
In the United States, 80% of both men and women said they play video games, and half of smartphone owners said they play on a smartphone daily. Gen Z and Millennials said they play video games an average of 11 and 13 hours per week, respectively. Gen X gamers followed closely behind with around 10 hours of game play every week.
“While streaming video on-demand business models look much the same as they did when they were created 15 years ago, social media and gaming companies have quickly evolved their offerings, leveraging technology, and capitalizing on behaviors,” Jana Arbanas, vice chair, Deloitte LLP and U.S. telecom, media and entertainment sector leader, said in a statement. “Social media is free and available anywhere, anytime, offering both passive and interactive experiences with endless streams of personalized content, without the cost of a subscription. And more people are interacting and socializing in game worlds that host millions of users, brands and franchises, and major non-gaming events. SVOD companies aren’t just competing with each other for audiences, they are also competing with different, more social and immersive forms of entertainment.”