Nearly 7 in 10 (69%) TV content viewers in the United States use free streaming services at least monthly, a sharp increase from 42% in 2019, according to Horowitz’s latest “State of Media, Entertainment & Tech: Subscriptions 2023” study. This rapid growth in usage of free streaming services is driven by the number and variety of free, ad-supported streaming TV (FAST) services, which offer linear content in addition to their on-demand libraries, available to consumers today. The free services consumers in the survey are using the most are Peacock, Tubi, Pluto, and YouTube.
On the subscription streaming (SVOD) side, with self-reported total average spending on these services over US$50 per month, data from the Horowitz study indicate that there is a growing appetite for managed services to help control costs. Cord-cutters were surveyed about how much they perceive they are saving now that they cut the cord. In 2019, over half of cord-cutters felt they were saving “a really good amount”; in this current study, that number dropped to 33%. And already, 1 in 3 (30%) consumers indicate that they pay for at least one of their streaming services in combination with another service they have (for example, as a bundle with another SVOD, through a service like Amazon Prime, or as a perk with a cell phone plan).
The Horowitz study also looks at trends regarding MVPD services. After years of decline in MVPD subscriptions, penetration of traditional cable/satellite services seems to be remaining steady. Consistent with last year, 52% of TV content viewers now subscribe to MVPD services, and customer satisfaction with their service overall among those subscribers is high, at 80%. Satisfaction numbers have increased slightly over the past few years as less happy customers abandon their MVPDs for streamed options, while MVPD loyalists who derive a lot of value out of the service remain subscribed. Notably, 1 in 3 cord-cutters (32%) say that if the cost of all their streaming services continues to increase, they might consider going back to cable.
“The data from this year’s study points to some important opportunities for both media companies and consumers. The adoption of AVOD/FAST services — and the concomitant increase in streaming ad revenue we can expect to see — will help offset revenue loss on the linear side, which is critical as programming costs continue to skyrocket,” commented Adriana Waterston, Chief Revenue Officer and Insights & Strategy Lead for Horowitz Research.
“On the consumer side, managed services — in which subscribers can see and manage all their streaming content in one place — would be an antidote to the challenges inherent to today’s highly fragmented streaming space, and consumers seem open to consolidating their services together. It is a matter of which companies will compete to be the managed services solution for the streaming age, between traditional MVPDs and tech companies like Amazon, Samsung, Roku, and Apple,” Waterston added.
The full “State of Media, Entertainment & Tech: Subscriptions 2023” report explores the challenges and opportunities of the pay and free TV environment, including MVPDs, vMVPDs, SVODs, AVOD, FAST, and OTA, and examines what services TV content viewing households are using and paying for, drivers for subscriptions and churn, satisfaction with video services, and more. The survey was published in March 2023 among 2.200 adults in the United States.
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