29 JUL 2022

Streaming market in the United States returns to growth in the second quarter

The proportion of households in the United States with video streaming services has grown to 88% (up 2% points quarter-on-quarter), after seeing no growth in during the first quarter of 2022, according to Kantar.

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The proportion of households in the United States with video streaming services has grown to 88% (up 2% points quarter-on-quarter), after seeing no growth in during the first quarter of 2022. This increase means there are now 113 million households accessing streaming services as of June 2022, according to Kantar’s Entertainment on Demand streaming analytics and consulting service.

The report also revealed that growth in US streaming is coming from all streaming tiers: SVOD is up 1.5% points to 82.9%, AVOD grew by 1.6% points to 26.9% household penetration, and FAST grew by 2.1% points to 22.3%. While all three tiers drove growth of streaming during the quarter, growth of FAST slowed quarter-over-quarter (by -2% points) as growth of AVOD accelerated (by +3% points).

Stacking is once again growing quarter-over-quarter, with the average streaming household in the United States accessing five different services. As stacking grows, churn remains high at 8% of subscriptions cancelled. Value is increasingly important to retaining streamers as platforms are competing for screen time or risk being cancelled and replaced.

Meanwhile, according to Kantar’s Entertainment on Demand streaming analytics and consulting service, cable television has declined, losing more than 1 million subscribing customers from between the first and second quarter of 2022. Therefore, cable TV now has a household penetration of 55% in the United States.

Regarding OTT platforms, Netflix subscribers continue to shrink, resulting in a decline in streaming market share. In the second quarter, 61% of US streaming households accessed Netflix, down 6% points year-over-year. Prime Video is the #1 destination for new SVOD subscribers for the fifth consecutive quarter, but there was increased competition from Disney+ and Apple TV+ gaining share.

Looking ahead, Kantar expects to see continued high rates of churn as consumers, particularly those opting for AVOD subscriptions, seek variety in the content they consume. "Note that overall streaming penetration grew in the second quarter, despite churn being high in the same quarter. This reflects the new normal of platform hopping. Platforms that prove their value via lower costs and a wide selection of content are better positioned for retaining subscribers. Yet, expect more consistent switching behavior and high rates of churn ongoing,"  the report says.

"The US streaming market is not showing signs of slowing down. Platforms today should focus their strategies around this new normal of boomerang behavior. This means retaining the loyal core of streamers, marketing trending titles to win streamers leaving other platforms, and communicating the content variety available on the platform to retain the boomerang subscribers,"  Kantar concluded.

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