New Data Reveals 3 Interesting Lessons About OTT Viewership
Consumers' relationship to the OTT industry is evolving as quickly as the industry itself. As more and more services launch, as new series premiere, and as beloved content changes homes, viewers are constantly swapping out where they watch and subscribe. Some are even giving up on streaming altogether. Even though overall viewing time has increased in recent years, a Q3 2021 report from Kantar shows subscription fatigue is taking hold and frustration with streaming may be on the rise. Here are 3 key takeaways for streaming video providers.
Overall subscriptions to streaming services are down.
In Q3, the proportion of U.S. households who have a video subscription dropped to 85%—down 1 point from Q2 2021 (though still up 2 points year over year). Interestingly, of the 4.5 million consumers who cancelled subscriptions in Q3, 85% (3.8 million) only had one subscription in Q2 2021. In other words, they now use no streaming services. Presumably, these viewers are deciding to stick with cable, perhaps not finding the experience of streaming worth the added monthly cost.
The decrease in subscribers is even hurting the big players. Though Amazon Prime Video had the most new subscribers in Q3 of any OTT, its churn was still higher than acquisition, meaning Amazon’s viewership still declined 2.4%. Netflix also had a quarterly dip, with penetration down 1.8% in Q3.
Among loyal streamers, stacking subscriptions is increasing.
Though streaming as a whole lost viewers, those who kept using OTTs are increasingly enthusiastic, with the number of streaming viewers signing onto new services up in Q3. This behavior, often called subscription “stacking,” grew in the last few months, and the average subscriber now has 4.2 streaming subscriptions, up from 3.8 in Q2.
Interestingly, the viewers most likely to stack subscriptions are not signed up to Netflix, Amazon Prime Video, or Hulu. Instead, the highest rates of stacking tend to be found among consumers of newer services like Apple TV+, HBO Max, Peacock and Paramount+. It’s not necessarily great news for these platforms, though. Clearly, viewers who stack like this are testing out new services or subscribing for specific content and very likely to churn if unsatisfied. That means young OTTs need to work overtime to ensure that they offer not only fantastic content but seamless viewing experiences if they want to hold onto these viewers. Though content is important, another 2021 report found that users say “ease of use” and “videos not re-buffering” are the top factors when deciding which video service to use.
Ad-supported content is gaining ground.
Cost is another big reason viewers churn, and free, ad supported services offer a massive benefit to cost conscious streamers by either reducing or altogether eliminating subscription fees. Use of these services grew in Q3: 14% of consumers now watch free ad-supported video services (up 3 % quarter-on-quarter) and 21% access paid ad-supported (up 0.8% quarter-on-quarter).
Yet, with stacking on the rise, these services are far from immune to viewership loss. Despite affordability, viewers may stop using a service that has a frustrating experience like re-buffering or repeating ads, or doesn’t offer compelling content. And these ad-supported services will lose out on the ad monetization that drives their business.
The past years have seen great growth across the OTT industry, with viewers across the globe increasingly relying on streaming for their viewing needs. But it’s clear from recent data that streaming’s hold on modern viewers is still tenuous, and many are perfectly willing to abandon streaming altogether for other forms of entertainment. Great strides need to be made in perfecting the experience if the industry wants to overtake cable once and for all. And for individual service providers, it’s more critical than ever to find ways to stand out as high rates of churn undermine growth in new subscribers. It will be interesting to see who manages to break out ahead in the coming year.