Cost is the most important factor in deciding to subscribe to a brand new video streaming service for almost half of the consumers (46%), according to Deloitte Digital Media Trends 2021 report, driving 55% of respondents to choose free, ad-supported video services. The report also highlights that price sensitivity is key across all types of entertainment services, as respondents using video (49%), gaming (38%) and music (37%) services would cancel or stop if the price for the services increased.
The study also reveals that the COVID-19 pandemic has amplified consumers’ appetite for video games across generations, as 87% of Generation Z, 83% of Millennials, and 79% of Generation X say they play video games on devices such as smartphones, gaming consoles or computers at least weekly, which helped them stay connected to other people and get through difficult times.
Additionally, the report shows that content is the second most important factor when deciding to subscribe to a new streaming video service, as mentioned by 35% of consumers. The study highlights the strong competition among providers, as the average video subscriber has four paid streaming services, music subscribers pay for an average of two services and gaming subscribers pay for an average of three services. On the other hand, 52% of respondents find it difficult to access content across so many services, 66% get frustrated when the content they want to watch is removed from a service and 49% are frustrated when a service doesn’t make good recommendations for them. The churn rate for video streaming services remained at around 37% from October 2020 to February 2021, the report also reveals.
“Churn rate has long been an important factor on the agenda of the telecommunications industry and now, as a result of the effects of the COVID-19 pandemic, the media and entertainment sector is facing the same challenge. The consumer behavior that we witnessed during this period regarding streaming services is likely to contribute to the emergence of a more mature and even more competitive market. In this context, providers will focus on customer retention, will intensify their quest for relevant content and will develop more customized and unique user experiences, as was the case of Netflix which posted free educational content on their own Youtube channel in the context of school closure caused by the pandemic and of HBO Max which started streaming movies the same day they debuted in movie theaters”, said Andrei Ionescu, Partner-in-charge, Consulting and Risk Advisory, Deloitte Romania.
The report underlines that listening to music is a top-three favorite entertainment activity for all generations, as 60% of respondents have a paid streaming music service, and the same share have used a free, ad-supported music service. For those who pay, the library of music was the primary reason, followed by an ad-free and reasonably priced experience. For those using a free, ad-supported music service, zero cost was the primary reason, followed by ease of access and the broad range of content.
Deloitte Digital Media Trends 2021 has been conducted on over 2,000 US consumers.