The not-so-great news: Streaming services’ churn rates — which averaged about 20% pre-pandemic and declined a bit early in the pandemic — are now at 37%.
The good news: Just 3% of those canceling video services are not replacing one service with another, according to Deloitte’s latest annual Digital Media Trends survey.
Also falling in the not-so-great news category, at least for entertainment companies betting billions to launch and grow new streaming video services: Gen Z’s favorite entertainment activity is games (26%), followed by listening to music (14%), browsing the internet (12%), engaging on social platforms and in fifth place, watching TV or movies at home (10%).
Also, close to half (46%) of respondents across generations say that video games have taken away from other entertainment time.
“In a world of limitless choice, consumers can easily jump to competitors or other forms of entertainment as they weigh cost, content and ad tolerance, making it challenging for media companies to earn consumer loyalty and cultivate enduring customer relationships,” sums up the report.
Still, watching TV and movies at home remains the favorite entertainment option overall, with 57% ranking it among their top three out of 16 entertainment activities.
Also, 82% of U.S. consumers report subscribing to at least one paid streaming video service, and the average subscriber now pays for four such services. That percentage is up slightly from the pre-pandemic period, although down from five services in mid-pandemic.
Content (35%) and cost (46%) are the most important factors in deciding to subscribe to a new paid streaming video service.
Asked what factors caused them to cancel a paid video, music or gaming service, an increase in price was the biggest reason.
But 52% say they find it difficult to access video content across so many services, while 49% are frustrated when a service doesn’t make good recommendations for them and 53% say they are frustrated by having to subscribe to multiple services to access the content they want.
Two-thirds of consumers say they get frustrated when content they want to watch is removed from a service.
Premium video-on-demand — paying a separate premium fee for early home viewing of a new movie — is a bright spot. Among those who have tried PVOD, 91% say they would rent again.
“Media and entertainment companies with a deeper understanding of customer concerns about content, cost and ad tolerance across all entertainment options and generations can cultivate long-term relationships and reduce churn,” sums up Kevin Westcott, vice chairman Deloitte LLP and U.S. technology, media and telecom leader.
Interesting---but Gen Z is hardly the core audience for TV and asking folks what their "favorite" entertainment activity is is certain to put TV in a very poor place. It's simply not cool to say that "TV" is your fave. However if one tracks the media consumption of Gen Z using meters, I'd bet that "TV" does a lot better than this study reported---a lot better.
Who is the "core audience" for watching TV? And why is asking what your favorite activity is putting TV in a poor place?
If you follow the trends over the last decade, TV loses against all demographics while gaming has consistently increased time spent with younger audiences.
My 80 year old parents started DVRing 15 years ago and cut the cord 5 years ago and they are hardly the tech-forward, need-it-now consumer that most advertisers want. TV has been on a steady decline for the past 15 years and it's odd that so many in this industry want to pretend like TV is the dominant factor that it once was.
Dan, thanks again, for your questions. Your interest is much appreciated.
The "core" audience for TV---as documented by countless surveys over the years--has always been people who are home more often than others. This usually means the sickly, older, retired, folks or those adults who are chronically unemployed plus, of course, children who are sent to bed early in the evenings. Over and above these generalities is the underlying factor of smarts. Survey after survey has shown that even if you hold the ages constant, those with lesser educations tend to watch a lot more TV that those who are suppposedly better educated. This is interpreted---and rightly so in my opinion, as meaning that since much TV content is---shall we say, mundane or of a trivial nature----that people who are less demanding about content, intellectually---or, dare I say it---not too "smart" ---will accept more of TV's content as worthwhile or informative than a very smart person, such as yourself. That doesn't mean that every old person is a heavy viewer or that every young person is a light viewer and the same goes for those we might label---perhaps, incorrectly----as "smart" or "not so smart". But the patterns ---directionally---are plainly evident.
As for my contention that people will not be inclined to rate TV as their "favorite" in a survey such as this, that's just my most humble opinion---though it's based on many examples where actual mechanical measurements of viewing behavior do not correlate well with what people say is these types of studies. Finally, like it or not, "TV" isn't dead by a long shot. It's merely morphing into new venues.
I've checked that the number of participants for this online survey is 2,009, and I am wondering if the sample size is enough for Deloitte to draw reliable conclusions.
(I am not very good at statistics lol)
Yujin, in my opinion, the sample size is not an issue in this case as it is large enough for this kind of very generalized research. The main question is do the replies actually reflect what the respondents do in terms of their use of the various media? Directionally, probably---but not likely in terms of actual time spent. That would require a much more complicated survey with a larger sample and another questionning method.
Yeah, I think what you said makes sense. Thanks Ed:)