A new Kantar U.S. MONITOR study of consumer attitudes and behavior around television streaming finds both opportunities and risks for streaming service providers and media companies.
Room to grow (through content)
It’s difficult to find someone who doesn’t subscribe to a streaming service today. Per Kantar U.S. MONITOR, 68% of respondents report they watch shows on streaming services daily or weekly. But 20% of the population reported no involvement with streaming services whatsoever.
Perhaps unsurprisingly, these non-streamers tend to be older; 57% are Baby Boomers or older. And while U.S. MONITOR finds non-streamers are not especially adventurous when it comes to tech (only 23% feel comfortable taking risks when buying the newest technology vs. 50% of streamers), that does not mean they don’t present an opportunity for media companies. Rather, it suggests streaming providers should take a content-first approach rather than a tech-first approach when attracting new users.
Take sports, for example. More than half of adult U.S. sports fans in U.S. MONITOR cite coverage of sports as being an important factor when deciding which streaming or cable platform to purchase. Major streaming services such as Apple TV, Amazon and Paramount+, in fact, have placed big bets on major leagues like MLS, NFL and international soccer in an effort to win over non-streamers, many of whom prefer cable for its live sports options. As TV sports deals like the MLB’s potentially change the sports media landscape, they also create opportunities, and streaming may be the win-win solution that leagues and streaming services alike are looking for.
There are opportunities beyond sports as well. Understanding the core values of these non-streamers can help guide content development that resonates with their attitudes. Other factors, like streamlined UX and recommendation algorithms may need to be augmented based on the needs of non-streamers who become first-time streamers. For example, their lower levels of interest in discovering new content may require an interface that clearly delivers the content they signed up for front and center.
The good news for media companies is that most viewers feel the content on streaming platforms is top-notch, from the quality of original content to the availability of interesting programs, with 74% of those with streaming access reporting they never have problems finding something to watch on their streaming service.
However, streaming providers must keep in mind that they are continuously competing for the attention of viewers, even after they’ve started watching. U.S. MONITOR finds that the majority of viewers across all generations multitask while they watch television, including a whopping 88% of Gen Z and 85% of Millennials. Successful streaming content today must either be intensely captivating to ward off distraction or assume the role of companion to a viewer’s daily routines.
Fatigue, password sharing and cost cutting
The average U.S. MONITOR respondent has access to roughly four streaming services, and some viewers are beginning to show signs of “streaming fatigue,” particularly among younger generations. In fact, 52% of Gen Z and 50% of Millennials say they are “overwhelmed by all of the subscription services I use.” Streaming services and media companies should be seeking ways to simplify the experience for the viewer, whether it be through acquisition or partnerships to bring services under one roof or in a more connected ecosystem.
Another challenging area for streaming providers is password sharing. In the early days of streaming, the industry took a hands-off approach to password sharing to encourage growth, but as they look to clamp down on the practice to increase revenue, they face the powerful headwind of ingrained consumer behavior. In the last five years, the number of America adults in U.S. MONITOR who view password sharing as acceptable has shifted from a minority to a majority—from 44% in Q2 of 2017 to 61% in Q1 2023, including 81% of Gen Z and 75% of Millennials. In addition, the number of people who admit to actually sharing their own passwords has jumped from 21% in 2017 to 39% in Q1 2023, an 86% increase.
Most consumers with streaming access (56%) agree that they could not live without their favorite streaming service. However, a challenging future may be ahead if inflation remains steady; U.S. MONITOR finds that more than 40% of Gen Z, Millennials and Gen X have reduced their spending on in-home entertainment as a result of rising prices and inflation. The proliferation of free, ad-supported streaming services like Tubi, Freevee, the Roku Channel and Pluto TV may be helping consumers in this effort. Fox-owned Tubi, in fact, recently reported it reaches 64 million users. The near-term future for premium streaming services will be to provide value for the price—a tall task given that streaming has been such a good value for viewers for the last decade.
Continued success for streaming service providers will mean not only capturing new subscribers but justifying higher prices and lowering churn among current users. Toward those ends, streaming providers and other media or content publishing companies should leverage consumer research to help pinpoint the types of quality content and experiences that will resonate with their audiences, while keeping more specific opportunities like live sports, simpler UX, free tiers and streamlined search in mind.