Media companies strive to retain subscribers as social begins to bite | Media Analysis | Business | News | Rapid TV News
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Nearly two years into the pandemic, media companies are facing stiff competition for consumer loyalty from more interactive social media and gaming companies and while consumers have more time for home entertainment, says research from Deloitte.
Deloitte survey 21Oct2021
In the firm’s 15th annual Digital Media Trends survey, taken in August 2021 among US consumers, Deloitte revealed that changes shaped by the pandemic have continued and the key finding was that it was becoming clear a return to the “old normal” is not imminent. Changes wrought by the pandemic are continuing, but compared to six months ago, consumers across generations have actually been spending more time watching TV and browsing the internet as they seek indoor entertainment options and avoid out-of-home experiences.

For streaming video providers, keeping subscribers was harder than ever as people — especially younger generations — were managing costs by adopting ad-supported options, looking for discounts and bundles, and moving on and off services to satisfy their content needs.

As many as 84% of US consumers said they were spending more time on online entertainment activities and less on in-person entertainment outside of the home recently. About the same percentage (82%) say they were concerned about Covid-19 variants, and that’s likely keeping people indoors and online.

Boomers and Gen X still ranked “watching TV shows or movies at home” as their favourite entertainment activity; Gen Z still ranked “playing video games” as their preferred form of entertainment. Nearly two-thirds of respondents were both frequent gamers, playing at least once a week and were engaging with at least one social media service several times a day.; on average, these frequent gamers play for around 12 hours a week.

Subscription video-on-demand (SVOD) was deemed a market of progressive providers and savvy subscribers. The survey showed that with the recent flux of premium and ad-supported services, US consumers has additional options for watching new original content and accessing a broad content library. The survey also revealed that consumers were getting better at developing strategies to access this content while keeping their costs low. In all, 84% of respondents now paid for a SVOD service with the average household having four subscriptions, largely unchanged during the past year.

The SVOD churn rate remained stable at about 38%, although it varied from service to service. The top reason consumers cancelled a paid SVOD service was due to high cost followed by the fact they finished the show they signed up to watch. So called “churn & return” behaviour was most common with younger generations. Almost half of millennials (47%) and 34% of Gen Z cancelled and then resubscribed to the same streaming video service later that same year.

Led by cost-sensitive and savvy millennials and Gen Zs, 65% of respondents reported using free ad-supported video services.

“We’re seeing an important shift in what consumers are paying attention to and how they are choosing to engage and be entertained,” said Kevin Westcott, vice chairman, Deloitte and US technology, media and telecom leader, commenting on the 15th annual Digital Media Trends survey.

“While streaming video will continue to gain momentum, especially with leading services now pursuing global markets, these companies will also need to address churn and retention among diverse segments in different markets, and shift from merely measuring subscribers to understanding how to unlock the lifetime value within their customer bases. It will serve them well in the future to develop growth strategies that include both social video and social gaming, whether through partnerships, acquisitions, or simply establishing a really effective social media department.”