Eighty-two percent of U.S. consumers subscribe to at least one paid streaming video service, Deloitte's 15th annual Digital Media Trends survey finds.
There is little doubt Americans are bullish on streaming: 82% of U.S. consumers subscribe to at least one paid streaming video service; and the average subscriber has four paid video streaming services, according to a new survey from Deloitte. However, the churn rate for streaming video services from October 2020 to February 2021 is still hovering around 37%, according to the firm's 15th annual Digital Media Trends Survey. The survey focused on how COVID-19 and shifting generational preferences have reshaped the U.S. media and entertainment landscape.
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With the country under quarantine for the past year, it's not surprising that watching TV and movies at home continues to be the overall favorite entertainment option, with 57% ranking it in their top three entertainment activities.
But when it comes to Generation Z, that changes significantly. Only 10% of Gen Z respondents cited watching TV or movies at home as their No. 1 favorite form of entertainment. Twenty-six percent said playing video games was their No. 1 favorite entertainment activity.
Cost concerns and frustrations
The survey also revealed there is growing competition for audiences among a crowded field of streaming video providers—but also with other forms of entertainment, including music, video gaming and social media services. 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, the media trends report stated.
In fact, respondents said an increase in price was the primary reason for them to cancel a paid video, music or gaming service, according to the survey. Another main finding was that 55% of respondents now watch a free ad-supported video service to subsidize or remove subscription costs.
Further, content (35%) and cost (46%) were cited as the most important factors in deciding to subscribe to a new paid streaming video service. Sixty-six percent said they get frustrated when the content they want to watch is removed from a service.
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Other sources of frustration? For starters, the difficulty in managing and paying for a plethora of streaming video services, the study found. As they chase niche content and trending entertainment, consumers also showed strong interest in ad-supported options that subsidize or remove subscription costs, according to the report.
Fifty-two percent of those surveyed said they find it difficult to access content across so many services, and 49% are frustrated when a service doesn't make good recommendations for them. Fifty-three percent were frustrated by needing multiple service subscriptions to access the content they want, the report said.
"Not only are American consumers more reliant than ever on digital media and entertainment, information gathering and social connection, there is also more competition for audiences among a crowded field of entertainment options,'' said Kevin Westcott, vice chairman of Deloitte and U.S. technology, media and telecom leader, in a statement. "This requires consumers to 'dance' between services introducing frustrations as they try to manage multiple subscriptions and keep track of their favorite content."
The media and entertainment companies that have 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, Westcott said.
Social media provides access to entertainment and information, but there are trust issues
The survey found that social media services have become a gateway for consuming music, video, games and news. However, there is tension between the value that consumers get from social media and the challenges of establishing trust, responsibility for content and the role of regulation, according to the report.
While more people, across generations, go to social media for news, 67% don't trust the news they see on these services. Consumers value social media, but they want more control over their data, and information that is more trustworthy. Other key findings:
- Half of Generation Z rank social media as the No. 1 way they prefer to get news, whereas only 12% prefer to get news from network or cable TV. Conversely, 58% of Boomers say they prefer news on network or cable TV, and only 8% look to social media first for news stories.
- For Generation Z, the top two activities on social media are listening to music, followed by playing video games.
- Consumers are divided around the 2020 U.S. Presidential Election; 43% of respondents felt that social media companies did a good job managing misinformation, while conversely 44% of respondents felt that they could have done more.
- Seventy-seven percent of respondents believe that the government must do more to regulate data collection and use.
- Forty-five percent said they are willing to pay for social media if it didn't collect their data.
"It's clear that consumers like the convenience of social media as a delivery platform for everything from entertainment to news, however, they also want to trust that social media companies are committed to distributing truthful, reliable information while protecting their own personal data,'' said Jana Arbanas, vice chairman at Deloitte and U.S. telecom, media and entertainment sector leader, in a statement. "By building trusted and equitable relationships with consumers that address the need for more transparency, agency, privacy and security, social media services can continue to build on their success as dependence on their platforms continues to grow."
Deloitte said the online survey of 2,009 U.S. consumers was conducted in February 2021.
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