AMERICANS SUBSCRIBE TO 27% MORE STREAMING SERVICES THAN LAST YEAR

Americans who have at least one streaming are more likely to subscribe to more streaming services in 2020 than they did a year ago. Between January and March, the average U.S. streaming household subscribed to 3.3 streaming services.

4 JUN 2020

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New data shared by Ampere Analysis proves that streaming services continue to gain steam at the expense of cable and satellite providers., showing that Americans who have at least one streaming subscription are subscribing to more streaming services in 2020 than they did a year ago. Between January and March, the average U.S. streaming household subscribed to 3.3 streaming services, a 27% increase from the same period last year, during which Americans subscribed to 2.6 services on average. According to Ampere, the average U.S. household is also paying USD 34 per month to stream, a spike in price as customers spent USD 30 per month during the first quarter of 2019. The numbers slightly declined during Q1 last year. A major contributing growth factor is the debut of several major streaming services. “The increase is driven primarily by the launch of Disney+ in November, with some additional growth from Apple TV+,” Ampere Senior Analyst Toby Holleran said. “The Disney+, Hulu, and ESPN+ bundle have also proven successful; we expect around 10-15% of Hulu subscribers to be taking the three-service bundle.”

The Covid-19 pandemic serves as a large factor contributing to the increase. The outbreak forced millions of people around the world to stay home, leading to 16 million new subscribers during Q1 seeking film entertainment. The streaming giant said that it had seen “temporarily higher viewing and increased membership growth” coinciding with the unusual portion of the audience at home. Roeku reported that its customers watched more than 13 billion hours during Q1, more than 49% from the same time last year. The figure comes out to be the same as if each of its accounts spends 3.75 hours of streaming content each day. On the contrary, cable and satellite have struggled to receive the same amount of traffic.

The Pay-TV industry suffered its biggest quarterly loss ever during Q1, with more than 2 million customers ditching their service. Soaring unemployment contributed to this, but streaming services were able to avoid the same cancelations because they cost much less than even the most affordable cable and satellite packages. “Given the unfortunate rate of U.S. unemployment the rising cost of Pay TV, the current lack of live sports, and much cheaper OTT alternatives, we expect that rate of cord-cutting to materially accelerate in the coming quarters,”  MoffetNathanson said.

The trend of streaming continues to rise as new services continue to hit the market. Quibi, Jeffrey Katzenberg’s new mobile-only service, debuted in April, and HBO Max just debuted last week. On top of that, NBCUniversal’s Peacock is set for its full rollout this summer. Even if the three services fail to reach the same heights as Netflix, Disney+, or even Hulu, they still offer viewers more options. Ampere projects the 3.3 subscription figure may already have rocketed higher during Q2. “Due to the increase in OTT use around the pandemic, as well as the recent HBO Max and Quibi launches, I feel this figure could be closer to 4 subscriptions per household now,” Holleran said, “although with many consumers already being converted and the 90-day free Quibi trial, the average spend per household won’t have increased much yet.”

The increase is driven primarily by the launch of Disney+ in November, with some additional growth from Apple TV+. The Disney+, Hulu, and ESPN+ bundle have also proven successful; we expect around 10-15% of Hulu subscribers to be taking the three-service bundle.” Toby Holleran Ampere Senior Analyst