How Much is Too Much? Streaming Price Hikes and Customer Impact
Last year was certainly a year of consolidation for the streaming space. Alongside the rise of ad-supported streaming tiers, we also saw significant impacts on plan pricing. In some ways, this was a necessary readjustment after the post-pandemic boom, but what is the wider impact on viewer’s pocketbooks? Are customers fed up with these pricing increases yet? Entertainment lawyer Brandon Blake, of Blake & Wang P.A., breaks down the findings of a recent Deloitte survey for us.
What Consumers are Spending on Streaming
On average, American households who use streaming services are splitting the bill over 4 platforms, with an average monthly spend of $61. That’s a steep 27% rise from last year’s $48 a month.
So far, so good. The whole point has been to evolve streaming into a profit-generating entity, instead of a profit-eating black hole. However, some worrying takeaways from Deloitte’s survey will need careful consideration.
Of the consumers surveyed, just under half indicated they would cancel their primary streaming service if they see another $5 hike. Perhaps more importantly, 36% also indicated dissatisfaction with the content available on streaming platforms, seeing them as not worth the price. This dissatisfied demographic leans young, too, which could have implications for the future of the streaming industry overall.
Streaming Churn- Yes or No?
However, while this indicates a coming flash point in streaming service pricing, we aren’t there yet. The number of households canceling paid SVOD services is on a minor downward trend. Bundling has helped with this, keeping churn lower. Tiers have also helped, with almost half of respondents using at least one ad-supported tier. A massive 57% used FAST services. Of note for advertisers, however, only 18% of consumers believe those revenue-boosting ads influence their purchasing decisions. It is hard not to compare that to the 54% rate of social media, for one.
We are at a pivotal moment for streaming services. There is a strong need to balance profitability demands with those of the audience consuming the services. With the data revealed by Deloitte’s survey in mind, it seems the road to a brighter streaming future will need to carefully consider the wider pricing implications of their services, too.
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