Why do users choose to have fewer and fewer SVOD services?

In 2023, for the first time, Hub Entertainment Research’s annual “Best Bundle” survey showed a year-on-year decline in the number of video sources viewers say they are using. With a majority of these consumers expressing significant concerns about the state of the economy, and six in ten expressing heightened concerns about rising inflation, it is not surprising that some of them have turned to their video subscriptions as a means of saving money.

In past years, while MVPD cord-cutting was continuing unabated, media companies could still rely on SVOD growth to offset some of the decline in linear TV viewership. However, in 2023, the cord-cutting trend persisted and was soon accompanied by a decline in SVOD subscriptions.

The “Big 5” SVOD services (Netflix, Prime Video, Hulu, Disney+, and HBO Max), in particular, experienced a decline in subscribers since last year. Not only did overall usage of any of the five platforms decrease compared to 2022, but fewer households opted to stack three or more of them.

One bright spot in the video ecosystem continues to be FASTs. After steep increases in consumption in 2021 and 2022, usage of these free video alternatives remained strong in 2023. As more households cut the cord, FASTs provide viewers with an alternative to lean back and surf through an array of linear streaming channels.

Although it may be tempting for media companies to anticipate consumers reverting to adding subscriptions to their stacks as inflation moderates, such optimism may be misplaced. Viewers consistently prioritize value ahead of pure price when deciding which SVOD platforms to keep, Hub Entertainment Research assured.

“If the ongoing writers strike persists long enough to significantly disrupt content pipelines, the value proposition of most services will not be attractive enough to entice subscribers to return any time soon. It could be two years or longer to determine whether the decline in the first quarter was a momentary pause in the growth of the SVOD ecosystem or a permanent reset,”  commented Mark Loughney, Hub Senior Consultant.