Despite Return to ‘Normal,’ People are Spending More Time and Money on Streaming Services Now than During Height of Pandemic
TMT Insight Briefing Report
- Even as more live entertainment options have opened, 79% of respondents said they spent the same or more time streaming than they did six months ago
- Viewers increased their streaming subscriptions to an average of 4.5 streaming providers in June 2021 from 3.9 streaming providers in December 2020
- The average monthly household spend on all streaming services increased commensurately to $55 from $47
- “Lucifer” was the most-watched show on streaming sites in June 2021; “Friends” cracks the top-three
The world may be coming out of its pandemic-induced haze, but customer desire to be snuggled up under a blanket in front of their favorite on-demand content has never been greater.
Even as virtually all pandemic restrictions have lifted, and the demand for live events, dining and travel has exploded, streaming services are consuming an increasingly large share of the entertainment market. So much so that monthly customer spending on streaming platforms has nearly doubled since spring of 2020.
To find out just how pronounced this trend is, J.D. Power conducted a third installment of its streaming pulse survey. It consists of responses from 1,209 U.S. adults who share their viewing preferences, usability challenges and plans for using these subscription-based services. Following are the key findings.
Quarantine’s Lasting Legacy: Streaming
More than any other change in the nature of television, it seems as though the mass quarantine of 2020 has acted as the impetus for a shift in customer behavior that will forever alter the way content in consumed. That’s because, as Americans head back to the office, they’re more eager than ever to cling to a piece of their stay-at-home routine. Overall, 79% of respondents say they are spending the same or more time streaming than they did six months ago.
More evidence of this trend is in the increased utilization of apps. The use of an app on a mobile phone or tablet to connect to streaming content has jumped to 36% of viewership in June 2021 from 25% just more than a year ago (April 2020). In contrast, respondents who said they used an app on their smart TV rose just 4% during the same time period.
Apps now represent the second-most used streaming connection path. Separate hardware platforms like Roku, Apple TV and Chromecast also got sizable boosts for reasons that could run the gamut from retrofitting a non-connected TV to make it “smart,” or accessing services that may not be available on specific brands of smart TV.
As a result of this uptick in consumption, customers now have a far greater tolerance for streaming bills, as monthly budget allocation to on-demand content has become as ubiquitous on a household balance sheet as a line item for mobile phones and car payments. Respondents said that they pay an average of $55 per month on streaming, up 17% since December, and a whopping 45% since last April.
What accounts for that change in spending? One culprit is price increases. Netflix got the ball rolling in October 2020, increasing the price of its premium service. In March, Disney raised the price of Disney+ to $8 a month, or $80 per year. Disney has also given ESPN+ two price increases this year, the second which goes into effect on Aug. 13, which has forced the service’s annual plan increase by about $20 this year alone.
Streaming services continue to add value to justify any past or future hikes. The race for big intellectual property has intensified, as each platform looks to gain a leg up on what it can offer its customers. Disney just committed to ponying up $400 million per year on a seven-year pact to secure the primary television rights to the National Hockey League, some of which will air on ESPN+. Peacock struck a deal with Universal Studios to bring its movies to the platform no more than four months after their theatrical release. And Netflix has announced a plan that would allow them to start streaming video games on the platform within the next year. And that’s on top of the increasingly ambitious original programming slate that each service continues to pursue.
Since the last installment of this survey, new players have entered the fray, leaving some skeptics to speculate the streaming boom has reached a saturation point. But, as more streaming options have come to market since our last survey, the number of households that say they subscribe to four or more services rose to 57% from 50%.
Part of this is likely due to emerging platforms in the market that capitalize on the disparate nature of streaming services to promote a need to subscibe to a number of platforms. For instance, Discovery+—which launched in the U.S. on Jan. 4—houses the full HGTV library, arguably the service’s most valuable content. In March, Paramount+—which originally launched as CBS All Access in 2014—was re-branded with an expanded library and the promise of the release of anticipated movie titles such as Top Gun: Maverick and PAW Patrol: The Movie just 45 days after their theatrical release.
So while the a la carte nature of streaming could lend itself to less customer spending, it appears the inverse is happening. The more choices, the more temptation to get access to a specific library.
Could That Reunion Be Paying Off Any Bigger?
HBO Max shelled out a reported $2.5 million per cast member to entice Courtney Cox, Jennifer Anniston, Lisa Kudrow, Matthew Perry, David Schwimmer, and Matt LeBlanc to revisit their old coffee-sipping, fountain dancing ways, and it appears to have been worth every penny.
The Friends reunion was not only watched by an estimated 29% of streaming households on its May 27 premiere date alone, but the trip back to Central Perk also helped give the original show a signal boost as tantilizing as Ross’s Thanksgiving leftover sandwich. Friends was the third-most streamed show in June, which helped boost HBO Max to a 41% subscription rate among respondents, up from 22% in December and trailing only Netflix, Amazon Prime, Hulu, and Disney+.
Meanwhile, the May 28 debut of the second-half of season 5 of Lucifer–the most streamed show in the month of June—helped Netflix+ maintain its industry-leading market share. Overall, 89% of respondents said they subscribe to Netflix, followed by Amazon Prime (76%), Hulu (64%), and Disney+ (52%). All three of those runners up experienced significant jumps, particularly Amazon Prime, which is the first non-Netflix platform to break the 70% mark.
This J.D. Power TMT Insight is based a survey of 1,209 U.S. adults from June 8-9, 2021.
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This J.D. Power TMT Insight was authored by Ian Greenblatt, managing director of TMT Intelligence at J.D. Power. Please contact us at the numbers below to connect with Mr. Greenblatt, or to learn more about the underlying research.