New US video subscribers dropped from 12.9% of US households to 3.9% year on year, according to Kantar’s Entertainment on Demand, the solution measuring streaming service subscription levels, which analyzed subscriber behaviors in the United States for the second quarter of 2021. Furthermore, the analysis indicated that the proportion of households in the United States who have a video subscription has remained consistent at 74.6%, meaning there are now 95.8 million households with subscriptions, as of June of this year.
Whilst most services have suffered a reduction in new subscribers for the second quarter of 2021, Amazon Prime Video has gained market penetration (up +3% YoY to 58%) and ranks first place for share of new subscribers. Looking at these new subscribers’ path to purchase, Amazon Prime Video is gaining through owned touchpoints such as offering a free trial and subscribers visiting Amazon.com. In fact, Amazon Prime Video is currently amongst the highest for free trials at 31%, beaten only by Apple TV+ at 37%.
As well as gaining new subscribers, Prime Video’s average stacking of subscriptions has only increased from 2.6 to 2.8 YoY, compared to the market average of 3.1 to 3.8. This means there is less competition for viewership time and indicates that subscribers are getting what they need from fewer services. Examining the reasons for satisfaction, Amazon Prime Video scores higher than the total market for touchpoints such as ease of use (48% vs 44%), the amount of original content (44% vs 41%) and value for money (44% vs 41%).
Netflix has not fared well in garnering new subscribers this quarter. Its share of SVOD-enabled households is at its lowest, down to 67% from 74% in Q2 2020, and similarly their share of new SVOD subscribers hit 6% this quarter, down from 13% last year. Although share of the market outranks the competition, the saturation of the US VOD market may be resulting in Netflix subscribers trading the service in for a newer model. Whereas Disney+, Hulu and HBO Max take the top spots for content this quarter, Netflix comes in fourth and fifth position with “The Crown” and “Lucifer”. This is the first time they have missed out on a top three spot for content enjoyed for at least the past five quarters.
Further indication that Netflix subscribers are picking up new services comes from the average number of VOD subscriptions. Netflix went from having the lowest stacked subscriptions of the main services at 2.5 last year to 3, meaning that Prime Video now has a lower average. This is another indication of Amazon Prime Video managing to navigate the new landscape. In addition, the most common stacks for Netflix subscribers are Netflix, Amazon Prime Video and Hulu. Interestingly, Netflix has the highest proportion of subscribers who say that someone else pays (27.4%), compared to Disney+ (26.3%) and Hulu (23.1%).
The newest member of the SVOD family, Discovery+ has captured a tenth of all new subscribers and is rated first for satisfaction with the quality of the shows. In its first six months, Discovery+ is already delivering a great onboarding experience for new customers, which is rivalling Netflix. The two services sit in top place when it comes to ease of setting up the service on a device (8.6 average score) and sign up being simple and intuitive (8.6). Furthermore, Discovery+ beats Netflix on subscribers being able to find content they wanted to watch (8.5), although Disney+ performs strongest on this onboarding touchpoint (8.6).
"With three quarters of US households now accessing VOD services, room to grow is slowing and there are less gateway subscribers entering the market. This is driving the competition as existing SVOD households shop around for the content they love. Price sensitive consumers in the United States now have more options than ever to drive down subscription costs, with existing services splitting out their offerings into premium, ad-supported and free tiers," the report says.