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The State of the Streaming Wars

  • Rob Patterson

Though Netflix and Hulu have long been established household names, you may have noticed that a few competitors have popped up in their midst. Of course, by a few, we mean many. The streaming wars are in full swing in 2020 as 90% of U.S. consumers report watching video content on the internet. Further illustrating the growth of the streaming segment, Nielsen adds that 60% of Americans subscribe to more than one paid video streaming service.

However, with the introduction of services such as Disney+, HBO Max, and NBCUniversal Peacock, the streaming landscape just got a whole lot cloudier. Content libraries are becoming increasingly fragmented, which means that consumers now have to think about their streaming services as a portfolio – strategically managing them in order to get the right mix of content. As a result, we’ll see consumers “buying” and “selling” their services at any given time.

The early signs are there, too. Cable TV’s loss of market share has stagnated in the last year after years of decline, meaning that consumers might look elsewhere when looking to cut back. In fact, according to PwC, 64% of consumers who intend on subscribing to new content say they would downgrade or terminate a current streaming service in order to do so. Similarly, a quarter of consumers say they are actively looking to unsubscribe from some of their services, whether because of a lack of need, a gap in perceived worth, or simply making room for another service.

So, what are streaming services to do in order to stand out from the crowd? Here, we’ll take a look at what Americans value most in their streaming services and evaluate the challengers set to make advances in 2020.

 

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Assessing the Competition

In order to understand just how much new entrants will disrupt the streaming space, PwC asked consumers to name new market entrants. Though 51% couldn’t name any – speaking to a dearth of unaided awareness – many still admitted plans to subscribe to additional services when called out by name. The table below shows the percentage of consumers who plan to subscribe to new services.

 

Streaming Service Plan to Subscribe
Disney+ 33%
Apple TV+ 17%
HBO Max 11%
Discovery/BBC 6%
NBCUniversal Peacock 4%

 

Of course, there are some mitigating factors to these numbers, including that Peacock (set to launch July 2020) and HBO Max (May 2020) haven’t yet ramped up their promotional marketing efforts. However, we can still clearly see that the new entrants to the category will be usurping some market share – and, given what we know, it will likely be at the expense of incumbents.

 

Understanding What Consumers Want

To separate from the competition, streaming services need to have a keen understanding of the factors that drive retention and those that send consumers in another direction. The table below looks at the factors that are compelling people to retain streaming subscriptions.

 

Factor Rated as Very Important
Cost 84%
Ease of Use 81%
Variety of Content 79%
Streaming/Playback Quality 77%
Speed (Menu Selection, Loading Content) 74%

 

It should come as no surprise that cost, user experience, and variety of content rank highly in consumers’ minds. However, when it comes to the factors that compel consumers to subscribe to an additional service, one theme rises to the top.

 

Reason for Subscribing to New Service Percentage of Consumers
Expand Available Content 47%
Watch Programs I Used to Watch on TV 37%
Watch a Program I’ve Heard About 37%
Access Original Content that is Exclusive 35%
Replace Other More Expensive Services 29%

 

When it comes to streaming services, content is still king. That’s why services like Netflix and Amazon Prime Video continue to pour money into original content, especially with crowd-pleasers like Friends or The Office moving to HBO Max and Peacock, respectively. As content libraries continue to become more fragmented, budgets for original content should skyrocket accordingly.

The race is on for brands looking to win out in the streaming wars, and for the new entrants, awareness is all the more important. If your brand is looking to differentiate itself and introduce consumers to its offerings, contact us to learn how our suite of experiential-led services can help you build awareness, encourage trial, and earn lifelong loyalists.

 

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Sources: Nielsen Which Consumer Attitudes Will Shape the Streaming Wars 2020, PwC Video Streaming Shakeup Survey of Consumer Attitudes and Preferences 2020