By Chiara Piacentini
Staff Writer
Video streaming services have become a common way for viewers to consume media. In fact, according to explodingtopics.com, a group that analyzes trends, over 38% of TV usage is dedicated to streaming, dominating the streaming market share. According to Forbes, entertainment streaming appears to be the largest growing trend and shows no signs of stopping.
Thanks to the Covid-19 lockdown, streaming companies started seeing a significant increase in consumer streaming. Take Netflix, which saw close to a 22% increase in streaming usage among consumers between 2019 and 2020 and an overall 43% increase from 2019 to 2023.
The variety of streaming options also made streaming look more attractive compared to cable and broadcasting.
However, streaming services have been experiencing some hurdles this year now that the pandemic is over. Subscription fatigue is one issue, with the average number of subscriptions per consumer in the United States down by 13% when compared to 2022, according to Simon-Kucher, a consultancy firm.
Cost was the main deciding factor for subscription cancellations, as streaming services have gotten steadily more expensive.
Streaming has become a saturated market, so there’s heavy competition among streaming providers.
Another problem is that content fragmentation has caused consumer streaming budgets to shrink. Consumers believe that they will need to pay for multiple streaming services to access different forms of content, because each streaming service restricts their content to a certain target audience.
Considering that most streaming services are between $8 and $15 per month and are projected to grow more expensive, the willingness to pay has understandably declined globally by close to 10% from 2022 to 2023.
In order for video streaming to overcome these obstacles, companies will need to address these setbacks. Customization looks to be a promising solution. Taking into account that there are three types of users when it comes to price—price-sensitive, price value-oriented and value-oriented—both price value-oriented and price-sensitive consumers appear to make up the majority of the streaming industry’s customer base.
Based on these findings, streaming companies must focus more on striking a balance between cost and value to determine fair prices for the streaming packages they offer.
Despite the challenges ahead, it doesn’t appear that video streaming will lose its top spot in the market share, at least for now. In 2020, 1.1 billion subscriptions to streaming services were made globally. That number is now close to two billion, as of 2023.
