Are people spending more time and money on streaming services?

While many people in the United States return to a certain normality, the consumption habits that people developed during the pandemic seem not to be in the past. In fact, even as virtually all pandemic restrictions have lifted in the country, and the demand for live events, dining and travel has exploded, streaming services are consuming an increasingly large share of the entertainment market. So much so that monthly customer spending on streaming platforms has nearly doubled since spring of 2020, according to J.D. Power.

To find out just how pronounced this trend is, J.D. Power conducted a third installment of its streaming pulse survey. It consists of responses from 1.209 US adults who share their viewing preferences, usability challenges and plans for using these subscription-based services.

“More than any other change in the nature of television, it seems as though the mass quarantine of 2020 has acted as the impetus for a shift in customer behavior that will forever alter the way content in consumed. That is because, as Americans head back to the office, they are more eager than ever to cling to a piece of their stay-at-home routine. Overall, 79% of respondents say they are spending the same or more time streaming than they did six months ago,”  the report says.

More evidence of this trend is in the increased utilization of apps. The use of an app on a mobile phone or tablet to connect to streaming content has jumped to 36% of viewership in June 2021 from 25% just more than a year ago (April 2020). In contrast, respondents who said they used an app on their smart TV rose just 4% during the same time period.

Apps now represent the second-most used streaming connection path. Separate hardware platforms like Roku, Apple TV and Chromecast also got sizable boosts for reasons that could run the gamut from retrofitting a non-connected TV to make it “smart,” or accessing services that may not be available on specific brands of smart TV.

As a result of this uptick in consumption, customers now have a far greater tolerance for streaming bills, as monthly budget allocation to on-demand content has become as ubiquitous on a household balance sheet as a line item for mobile phones and car payments. Respondents said that they pay an average of $55 per month on streaming, up 17% since December, and a whopping 45% since last April. One of the reasons behind this is price increases. Netflix got the ball rolling in October 2020, increasing the price of its premium service. In March, Disney raised the price of Disney+ to $8 a month, or $80 per year. Disney has also given ESPN+ two price increases this year, the second which goes into effect on August 13, which has forced the service’s annual plan increase by about $20 this year alone.

“Streaming services continue to add value to justify any past or future hikes. The race for big intellectual property has intensified, as each platform looks to gain a leg up on what it can offer its customers. Disney just committed to ponying up $400 million per year on a seven-year pact to secure the primary television rights to the National Hockey League, some of which will air on ESPN+. Peacock struck a deal with Universal Studios to bring its movies to the platform no more than four months after their theatrical release. And Netflix has announced a plan that would allow them to start streaming video games on the platform within the next year. And that’s on top of the increasingly ambitious original programming slate that each service continues to pursue,”  the report noted.

Since the last installment of J.D. Power’s survey, new players have entered the fray, leaving some skeptics to speculate the streaming boom has reached a saturation point. But, as more streaming options have come to market since the last survey, the number of households that say they subscribe to four or more services rose to 57% from 50%.

“Part of this is likely due to emerging platforms in the market that capitalize on the disparate nature of streaming services to promote a need to subscribe to a number of platforms. So while the ‘a la carte’ nature of streaming could lend itself to less customer spending, it appears the inverse is happening. The more choices, the more temptation to get access to a specific library,”  the study concluded.

Lastly, the report discovered that the May 28 debut of the second-half of season 5 of “Lucifer” - the most streamed show in the month of June - helped Netflix to maintain its industry-leading market share. Overall, 89% of respondents said they subscribe to Netflix, followed by Amazon Prime (76%), Hulu (64%), and Disney+ (52%). All three of those runners up experienced significant jumps, particularly Amazon Prime, which is the first non-Netflix platform to break the 70% mark.