After the pandemic-induced consumer scramble for premium video content last year, Futuresource Consulting’s latest wave of Living with Digital market research shows that industry momentum has slowed so far in 2021. Yet the study also points to a longer-term future resurgence.
With over 30 years’ experience advising clients on all aspects of the CE, Media & Entertainment sector, Futuresource Consulting’s latest study points to a slowdown of SVoD consumption and service uptake, with leading services such as Netflix and Amazon Prime Video remaining at levels similar to those seen at the end of 2020. This survey was carried out with more than 20,000 consumers across ten countries in June and July 2021.
“Despite the generally subdued performance of SVoD in the first half of 2021, consumers still have an appetite for more SVoD services in the upcoming year,” says David Sidebottom, Principal Analyst at Futuresource Consulting. “Respondents in all countries are showing an increased intent to subscribe to more services since the end of 2020, with the 16 to 25 age group leading the charge. We’re also seeing an emphasis in the USA, where 42% of SVoD subscribers told us they will take at least one more service in the next year. Across all countries combined, a third or more of SVoD service subscribers say they will take more services.”
Futuresource’s consumer research also indicates that although intent to subscribe to more services is up, consideration to cancel in the next six months has also increased across all services. However, many respondents may not carry this through. In addition, one in four stated that they will cancel and restart more than they have done previously.
As a result, new consumer behaviours are beginning to surface. “Previously, we’ve talked about service stacking, with people adding additional services on top of their existing subscriptions,” explains Sidebottom. “Now, the combination of higher intent to cancel, an appetite for more services, and a higher desire to dip in and out is culminating in a new phenomenon of service surfing, rather than service stacking. Could this indicate the beginning of consumers becoming savvier and effectively looking to replace existing services with new, potentially similar services, rather than add them on top? If so, this will result in steadier growth in the SVoD market.”
The new wave of direct-to-consumer services continues to make an impression with audiences. Futuresource’s latest insights reveal that HBO Max uptake has increased to one third of respondents in the USA, whereas half of Disney+ users are now watching the Star element of the service, where it is available. Peacock also continues its strong uptake in the USA.
Looking to OTT platforms, the share of total video viewing has also experienced some downward pressure, particularly for YouTube and other free video sites. The share of total viewing attributable to OTT is typically between 40% and 50% in most countries, with live TV stabilising or rebounding in many markets.
Despite the general market slowdown, Futuresource’s consumer research reveals some highpoints. AVoD uptake in the USA has continued across most services, with Tubi, the ad-supported streaming service owned by Fox, making the most impact. Over the year, monthly usage has grown to 15% of US respondents, with almost half of these claiming to watch five or more hours per week. Along with Pluto TV, it also has the highest mean rating of its TV shows at seven out of ten.
Futuresource also expects to see an appetite for SVoD return in the second half of 2021, which will persist through into 2022, despite more service hopping and cancellations, particularly among younger age groups.
At the time of research, cinemas were beginning to reopen, and respondents were generally more optimistic about returning when compared with the previous wave of research, conducted at the end of 2020. Around 70% of previous cinema goers say they have either returned or will return soon.
Futuresource expects Q4 to play a crucial role, as new windowing structures emerge and the relationship between cinema, PVoD and general premium video streaming establishes itself into 2022. The next wave of Living With Digital research will explore these relationships and customer sentiment further, as a wave of new movies are released over the coming months.
“We’ve found that consumer sentiment is generally more buoyant in this latest wave of research,” says Sidebottom. “Fewer respondents now feel they are financially worse off due to COVID-19 than they did during the middle or towards the end of 2020, although this is not the case in Germany or Japan. We’re getting indications of improved consumer confidence in most countries, and this wider positive view is likely to also have long-term positive implications for the video entertainment market.”
The latest Living With Digital report from Futuresource Consulting surveys 2,000 respondents each of the twelve countries covered, namely the USA, UK, Germany, France, Italy, Spain, Canada, Japan, Australia, Sweden, Mexico and Brazil. For further information or to purchase the report, please contact <<insert name and contact details>>.
Futuresource Consulting is a market research and consulting company, providing its clients with expertise in Professional AV, Consumer Electronics, Education Technology, Content & Entertainment, Professional Broadcast and Automotive. Combining strong methodologies and unsurpassed data refinement with in-depth market knowledge and forecasting, Futuresource deliver the latest insights and technological developments to drive business decision-making.
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