Streaming service trend is losing steam in the U.S., says survey
The media business is in the middle of an unmistakable trend toward streaming, but a UBS report last week suggests that the streaming trend may be maturing faster than expected. It seems that there’s not a lot of room left for consumers to add to the number of services to which they already subscribe, according to the UBS Evidence Lab Media Consumption Survey.
Consider this: 75% of poll respondents said they subscribe to at least one direct-to-consumer streaming service. That’s up slightly from a year ago when the figure was at 71%. But it’s flat with last December and, importantly, it’s close to the peak percentage of consumers that ever subscribed to cable.
Even more importantly: The number of direct-to-consumer services respondents subscribed to on average plateaued for the first time in the survey’s history at about 2.5 services. “This also aligned with the number of services respondents said they were willing to pay for, suggesting subscription fatigue is setting in,” the survey said.
In a separate report last week, UBS found that consumers aren’t downloading streaming apps as much as they had been — another sign that U.S. consumers are experiencing subscription fatigue when it comes to new streaming services. “Through May, download activity has generally slowed after consumers bulked up on streaming subscriptions during the pandemic.”
According to the report, HBO Max is the only app on track to see growth in the second quarter. Netflix is flat “even though U.S. downloads are trending toward their lowest quarterly level on record for Netflix in our dataset.”
Disney+, Discovery+ and Paramount+ “have seen meaningful deceleration.” The report says Tubi, Peacock and Pluto TV are seeing decelerating trends.
Sports media companies clearly are spending much more focus on building out their streaming services. All future media rights deals will include a big streaming component — that is undeniable.
On the other side of the coin, the pay-TV bundle remains challenged. UBS research showed that MVPD downloads are slowing much faster than streaming bundles, “suggesting an acceleration in cord cutting overall.”
But the UBS survey also showed that cord-cutting intentions have dropped, even as poll respondents expressed a rising dissatisfaction with the monthly cost of pay-TV.
“Both the intent to cut the cord or move to lower-priced video packages moderated vs. prior survey waves,” the UBS report read. “That said, we are skeptical and expect churn to rise and subscriber declines to worsen in the coming months as consumers get out of the house, watch less TV … and reevaluate their subscription spending.”
It is a folly to make any generalizations from a survey and monthly download trends for apps. But results should provoke some questions around how the media business will look in the next few years.
Is it possible that the business is approaching a new status quo, where streaming services and linear television coexist — much like television coexisted with radio three-quarters of a century ago or cable television coexisted with broadcast television at the beginning of the millennium?
What’s the upside for streaming services when consumers have remained consistent about limiting their number of subscriptions to just under three?
Cord-cutting is real, and cable channels are losing subscribers. The two big questions are: 1) How far will pay TV’s household distribution fall? And 2) Will streaming services be able to make up that difference?
No comments: