Data: Netflix and Disney+ outperform in Q3
October 25, 2023
Kantar, the marketing data and analytics company, has released its latest Entertainment on Demand (EoD) data on the global video streaming market. The latest EoD global study highlights key trends as the competition within the VoD landscape continues to intensify, with the influx of new streaming services and subscription models leading to households frequently switching, replacing, and stacking services. Key insights within VoD market during Q3 include:
- Disney+, Paramount+, Netflix and Apple TV+ all achieved strong subscriber growth.
- Prime Video pivots to ad-supported content as the platform misses the mark on user growth.
- Netflix boasted the most popular titles, with The Lincoln Lawyer taking the top spot, closely followed by Yellowstone (Paramount+) and The Witcher (also Netflix).
- Paramount+ and Apple TV+ emerged as leaders in attracting new subscribers, signalling a growing trend among consumers to explore fresh content beyond the industry’s key players.
- Live sports continue to be a differentiator and growth driver, with 1 in 5 new SVoD subscribers motivated by their desire to live-stream their favourite competitions.
- Netflix’s introduction of an ad-supported tier has successfully attracted family audiences, broadening its viewer base.
- Kantar estimates up to 30 per cent of Disney+ users are sharing their accounts with others. In response, Disney+ announced a forthcoming password-sharing crackdown, set to commence in Canada on November 1st.
Netflix maintains dominance, but the competition is strengthening
Netflix continues to assert its dominance, being present in two-thirds of streaming households, whilst 49 per cent of these households consider Netflix to be their primary streaming subscription. Whilst this percentage has dipped from 53 per cent, compared to the same period last year, the platform continues to perform strongly despite half of Netflix households subscribing to four or more services last quarter. In fact, their ad-supported tier continues to grow with one out of every three new subscribers, choosing this entry-price tier during the third quarter. Moreover, the implementation of password-sharing restrictions has spurred further growth, particularly in the US and Germany. Despite heightened competition, the streaming giant continues to set the pace for the industry.
Disney+, Paramount+ and Apple TV+ emerge as leaders in new subscribers
Disney+, Paramount+, and Apple TV+ have emerged as the leaders in the share of new paid subscribers in Q3. Disney+, in particular, experienced an exceptionally strong quarter, propelled by their most recent promotional price campaign in Europe, and the momentum generated by the company’s annual event, Disney+ Day – underscoring the effectiveness of their investments in core markets. Disney+ aims to leverage the forthcoming password-sharing restrictions to drive further revenue growth. To accomplish this, Kantar says they must ensure they build deeper connections with the more casual Disney fans, ensuring the subscription delivers sufficient value. Currently, almost two-thirds of households subscribed to Disney+ do not use the service daily.
For the first time, Paramount+ and Apple TV+ claimed the top 2 spots for share of new paid subscribers, thanks to the popularity of their respective hero titles, such as Yellowstone and Ted Lasso. Notably, Paramount+ and Apple TV+ now have a compelling advantage in the US market – sports content. Paramount+ benefited from the return of the NFL, while Apple TV+ has scored with the MLS. Apple TV+ now only ranks second to Netflix when it comes down to subscriber satisfaction with the quality of its shows.
Whether by including live sport or more effectively promoting their existing catalogue, the greatest challenge for Netflix competitors remains turning initial hero title attraction into long-term subscriptions amidst the cost-of-living crisis. The proliferation of ‘boomerang subscribers’, who consistently rotate services that fail to capture sufficient household viewing time, is still on the rise. In an era where stacked subscriptions are prevalent, securing screen time is vital.
Holiday quarter focus for Prime Video
Two-thirds (68 per cent) of Prime Members use and engage with Prime Video, with the lowest recognised usage in Britain and the highest in Spain. Emerging signs that suggest Prime Membership growth is slowing, which in turn impacts Prime Video’s growth potential. The upcoming launch of their ad-supported service underscores their pursuit of additional revenue streams from Prime Video, which, whilst still growing, still lags significantly behind Prime Delivery in terms of importance within households. Encouraging existing members to consume Prime Video content is likely to be a key focus on the back of slowing Prime subscription growth.
A persistent challenge faced by Prime Video users is the service’s interface. Despite substantial changes made just over a year ago, subscribers still find it less user-friendly than Netflix. With the holiday quarter now underway, Amazon will be hoping to persuade more households to invest in Prime Delivery Memberships and, in turn, drive engagement with the Prime Video service.
Sports Season is back
The third quarter saw excitement and variety in the sporting world, with different sports’ seasons commencing and ending. Whilst it is often high-budget TV series and films garnering the headlines, sports provide a universal language and one with global scope. Streaming services have been investing heavily in sports rights in recent years, and Kantar’s EoD data shows the highest ever percentage (19 per cent) of new streaming sign ups coming from new and expanded sport catalogues.
The migration of sporting content to streaming services is aggressively challenging traditional cable/pay-TV. Live sports, alongside the news, were often the cornerstone of cable/pay-TV, however with this gradual transition to streaming the value proposition is getting more challenging to convey to hard pressed households. Cable/pay-TV household penetration down has dropped from 44 per cent in Q3 2022, to 40 per cent in Q3 2023, a significant shift. In line with this, VoD services are placing a growing emphasis on sporting documentaries, appealing beyond the traditional live sports fan.