Covid-19 and the launch of new streaming platforms have kicked the streaming revolution into high gear. But the growth of leaders like Netflix is leveling off, and new data from Hub Entertainment Research suggests that competition for time from non-video categories bears much of the blame.
People consume entertainment from a huge variety of sources. Hub’s “Battle Royale” survey captured use of entertainment providers across ten different categories: everything from traditional and streaming TV, to gaming, streaming music, podcasts, audiobooks, and reading (digital or physical). The study revealed that the average household uses 12.5 different entertainment sources. The total is significantly higher among younger consumers (15.5) and households with kids (16.4).
However, only half of those providers are considered indispensable. Hub asked respondents to assign each source they use to one of two categories: a must-have (“entertainment your household can’t do without”), or a nice to have (“you might miss this but you could do without”). On average, only about half of the sources a household uses are considered “must-have.”
When it comes to which providers are most likely to be rated “must-haves,” two thirds of Netflix users (68%) rank it that way – the highest of any premium video platform. YouTube (69%) is considered a must have by just as many users, and Spotify (75%) ranks ahead of both. At the same time, special interest platforms that focus on one genre may have fewer subscribers, but those users are very loyal: both Crunchyroll (67%) and Funimation (65%) are among the most likely to be considered must-haves.
According to Hub, bundling content from more than one category may be an effective way to mitigate churn. Viewers are eager to simplify their growing list of video providers, but this desire for aggregation appears to apply to more than just video. For instance, among Amazon Prime subscribers who only use Prime Video, 45% say that Amazon’s entertainment content is a must-have. But among those who also use either Prime Gaming or Amazon Music, it is much higher (61%). And among those who use all three, 64% say they could not do without Amazon’s entertainment content.
“Our new ‘Battle Royale’ study shows the battle for entertainment share of mind has more competitors than many realize. But it also proves there are big opportunities for companies to engage consumers more deeply by leveraging IP across categories. We are already seeing this in action, whether it is Netflix’s commitment to gaming or ‘Halo’s’ success attracting viewers to Paramount+. In the future, cross category bundling may be a key tool to differentiate one provider from the many alternatives,” said Jon Giegengack, Principal at Hub and one of the study’s authors.
“It is exciting to see the loyalty that special interest or niche platforms engender. While they do not reach as many people as broader offerings, by providing something there is no simple substitute for, they are perceived as invaluable to their users,” added Mike Durange, Senior Consultant to Hub, also an author of the study.
Hub’s inaugural “Battle Royale” study surveyed 3.014 consumers in the United States, age 16-74. The data was collected in March 2022. This study will be fielded twice per year going forward.
In the future, cross category bundling may be a key tool to differentiate one provider from the many alternatives” Jon Giegengack Principal at Hub Entertainment Research