Parks: 89% of U.S. Households Have a Streaming Video Subscription

Parks Associates research sees an uptick of subscription streaming services among U.S. households, led by streaming video, retail memberships, and streaming audio, while 20% of households have a gaming subscription, outpacing gym memberships.

Citing data from a new consumer study of 8,000 U.S. internet households, Parks found that 89% of households have a streaming video service, and 32% subscribe to a streaming audio service. One in five internet households subscribe to a gaming service, while 16% have a gym membership.

“The evolution of hardware to a service model and demand to drive engagement and loyalty for brands through apps are driving the rise of subscription services,” Jennifer Kent, VP of research for Parks Associates, said in a statement.

Kent said that Spotify’s premium subscriber adoption is as high as that of Warner Bros. Discovery’s Discovery+ platform, which she said is the ninth-biggest video subscription service.

While many subscription services see adoption drop-offs after age 45, Kent believes that households can absorb the high prices for gaming and fitness services, appearing to prioritize convenience over the cost of streaming services.

Categories that provide entertainment (music, gaming) and convenience (child/baby, meal service) fare particularly well in terms of customer loyalty, according to Parks. The Dallas-based company believes that internet and traditional pay-TV providers, which traditionally have subpar consumer satisfaction scores, can benefit from partnering with — or bundling in — streaming services that garner higher customer satisfaction and loyalty.

“Competitive pressure will force market challengers to forge stronger ties, [such as] Walmart+ and Paramount+,” Kent said. “Subscription bundlers should seek offerings that span entertainment, productivity, and convenience.”

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Netflix Dropping Basic Subscription Plan for New Subscribers

Netflix is canceling access to its $9.99 monthly ad-free basic subscription plan for new or rejoining subscribers, effectively immediately. Existing basic subs will be able to continue access for as long as they remain subscribers.

Netflix made the move to push new subscribers to its lower-priced $6.99 ad-supported option, which launched late last year and reportedly has more than 5 million users.

The streamer’s higher-priced standard ($15.49 monthly) and premium ($19.99) tiers, which allow for $7.99 additional subs, remain unchanged.

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In addition to hikes in ad-supported revenue, Netflix, which ended the most-recent fiscal period (June 30) with more than 238 million global subscribers, says the move will have a positive impact on churn.

Speaking on the fiscal webcast, co-CEO Greg Peters said consumers who would have signed up for the basic plan are sorting into two tiers. They either take the lower-priced ad-supported plan, or they choose the standard plan.

“[It is] attracting a healthy share of sign-ups,” Peters said. “I think things are generally going as we expect in that regard.”

Parks: Consumer Monthly Spending on Streaming Video Services Drops 25%

Household penetration of streaming video services may be at an all-time high, but consumer spending on video platforms is declining, according to the latest research from Parks Associates.

Dallas-based Parks found a 25% decline in monthly consumer spending for streaming video services. U.S. internet households reported spending $69 per month on streaming video services in Q3 2022, down from $90 in Q1 2021, The drop happened at the same time the market remains saturated with 87% of U.S. internet households having at least one streaming service.

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Forty-five percent of U.S. internet households now have five or more OTT services, and their streaming activities influence spending on other services — 60% of households that recently upgraded their broadband service report streaming as the reason for the upgrade, according to Parks.

“Consumers are trying new services — they’re hopping in and out based on the season for sports, fresh content offerings, and the deals and bundles offered,” Elizabeth Parks, president/CMO of Parks Associates, said in a statement. “Currently, we see 32 million U.S. internet households hopping around with various services, and retention and churn will continue to challenge the industry.”

Report: Global SVOD Subscription Growth Topped Record 217 Million in Q3

Worldwide demand for subscription streaming video shows no sign of slowing. New data from Strategy Analytics found global growth in SVOD subscriptions reached a record 217.6 million in the third quarter, ended Sept. 30. The previous record stood at 211.7 million new subs in Q4 2018. Total SVOD subs approached 770 million, up 39.4% from 551.1 million subs in the previous-year period.

Major drivers included Netflix and Disney, with the two services combining for more than 250 million subs.

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“Until early 2020, it looked like the SVOD growth curve was heading toward a plateau, but the annual growth rate has actually been accelerating during the past twelve months,” Michael Goodman, director of TV and media strategies, said in a statement.

The report found that while Netflix remains the clear market leader, its share of SVOD subscriptions continues to fall as new entrants arrive. The explosive growth of Disney+ has helped the platform reach the No. 2 position worldwide.

“This evidence confirms that the transformation of TV is well under way,” added David Mercer, VP and principal analyst. “SVOD services are playing a key role in changing the way people watch TV, and we expect hundreds of millions of homes worldwide to move away from traditional broadcast and pay-TV over the coming decade.”