Research: SVoD appeal remains strong
May 12, 2022
Each year, the Best Bundle study from Hub Entertainment Research takes an inventory of the full range of TV services consumers use—and identifies the services that are gaining and losing market share over time.
Key findings from this year’s study:
- The average number of sources consumers use to access TV content has hit an all-time high in 2022.
- Counting traditional pay TV service, live TV streaming services, individual streaming subscriptions, free streaming services, transactional services, and antenna, the average consumer now uses more than seven sources for TV content.
- That number has been climbing steadily since 2018 and saw its biggest increase yet between 2021 and 2022.
- When it comes to subscription-based TV services in particular, use of streaming platforms is up over 10 points since last year.
- In fact, streaming subscriptions are reaching near universal penetration among US consumers, with 89 per cent having at least one—up 12 points in the past year.
- Note that while the proportion of US consumers subscribing to Netflix began to flatten out toward the second half of 2021 in Hubb’s findings, penetration is still 9 points higher in 2022 than it was at the start of 2021.
- Traditional pay TV service (cable, satellite, telco) is down 5 points year over year, while live TV streaming services such as YouTube TV, Hulu + Live, and Sling are up a comparable 5 points.
- Consumers are not only subscribing to more streaming services, but increasingly, they’re combining multiple services into their TV service bundles.
- Half of TV consumers now subscribe to three or more of the ‘Big 5’ streaming TV services: Netflix, Amazon Prime Video, Hulu, HBO Max, and Disney+.
- That’s up 10 points since 2021, and it’s nearly double what it was just two years ago.
- The appetite for TV content is not limited to TV subscriptions; more and more consumers are using free, ad-supported streaming platforms (FASTs) like Pluto TV, Tubi, Freevee, and the Roku Channel.
- Use of these free services is approaching 60 per cent, after having grown by close to 10 points each year since 2020.
- The rapid adoption of FASTs is one sign that when the value proposition is right, consumers will not only accept, but often prefer, ad-supported TV platforms. Another sign: the growing popularity of ad-supported tiers of streaming subscriptions.
- The distribution of ad-free vs. ad-supported subscribers differs dramatically for each of the five major streaming platforms that offer both options: with HBO Max the most heavily ad-free and the subscription version of Peacock the most ad-supported.
- But on an overall basis, consumers are more likely to subscribe to at least one ad-supported tier than an ad-free tier.
- The Netflix earnings results may have raised questions about the future growth of streaming subscriptions, but consumers apparently haven’t received that memo.
- More than three-quarters say they plan to add even more new services in the next six months. And that proportion intending to add is up 5 points since last year.
- And notably, among those who intend to add services, three-quarters say they’ll keep all of their current services when they do: simply adding to the size of their TV bundles.
- What’s driving all of this impressive streaming growth? With virtually every streaming service now touting its exclusive content, consumers need to have at least four TV services before a majority feel strongly satisfied with their TV bundle.
- Among those with four to seven services, a slight majority feel all of their needs are met “very well”.
- It’s not until one reaches eight or more services that a strong proportion (69 per cent) feel the same about their TV service lineup.
“Netflix’s subscriber loss in Q1 of 2022, and its anticipated losses in the following quarters, represent a tiny proportion of its global subscriber base,” said Peter Fondulas, principal at Hub and co-author of the study. “And in fact, at some point, a service as widely penetrated as Netflix has only so much room left to grow. In our view, it would be a grave mistake to take the Netflix experience as a sign that streaming TV services are on the verge of decline, as some analysts have suggested. The lure of buzzworthy exclusive content, and the sheer convenience of on-demand viewing, are two powerful forces that should keep these services growing at least for the near term.”