Analysis: FAST takes off
March 29, 2023
Currently, nearly seven in 10 (69 per cent) TV content viewers in the US use free streaming services at least monthly, a sharp increase from 42 per cent in 2019, according to Horowitz Research’s State of Media, Entertainment & Tech: Subscriptions 2023 study.
This rapid growth in usage of free streaming services is driven by the number and variety of free, ad-supported streaming TV (FAST) services, which offer linear content in addition to their on-demand libraries, available to consumers today. The free services consumers in the survey are using the most are Peacock, Tubi, Pluto, and YouTube.
On the subscription streaming (SVoD) side, with self-reported total average spending on these services over $50 (€46)/month, data from the Horowitz study indicate that there is a growing appetite for managed services to help control costs. Cord-cutters were surveyed about how much they perceive they are saving now that they cut the cord. In 2019, over half of cord-cutters felt they were saving “a really good amount”; in this current study, that number dropped to 33 per cent. And already, one in three (30 per cent) consumers indicate that they pay for at least one of their streaming services in combination with another service they have (e.g., as a bundle with another SVoD, through a service such as Amazon Prime, as a perk with a cell phone plan, etc.).
The Horowitz study also looks at trends regarding MVPD services. After years of decline in MVPD subscriptions, penetration of traditional cable/satellite services seems to be remaining steady. Consistent with last year, half (52 per cent) of TV content viewers now subscribe to MVPD services and customer satisfaction with their service overall among those subscribers is high, at 80 per cent. Satisfaction numbers have increased slightly over the past few years as less happy customers abandon their MVPDs for streamed options, while MVPD loyalists who derive a lot of value out of the service remain subscribed. Notably, one in three cord-cutters (32 per cent) say that if the cost of all their streaming services continues to increase, they might consider going back to cable.
“The data from this year’s study point to some important opportunities for both media companies and consumers,” notes Adriana Waterston, Chief Revenue Officer and Insights & Strategy Lead for Horowitz Research. “The adoption of AVoD/FAST services — and the concomitant increase in streaming ad revenue we can expect to see — will help offset revenue loss on the linear side, which is critical as programming costs continue to skyrocket. On the consumer side, managed services — in which subscribers can see and manage all their streaming content in one place — would be an antidote to the challenges inherent to today’s highly fragmented streaming space, and consumers seem open to consolidating their services together. It’s a matter of which companies will compete to be the managed services solution for the streaming age, between traditional MVPDs and tech companies like Amazon, Samsung, Roku, and Apple.”