The clash for streaming market share continues, with consumers perceiving the price-value relationship of many global and local streaming offerings to be shifting out of balance leading to service cancellations says Simon Kucher’s recent Streaming Study.
The Global Streaming Study 2023 was conducted during May 2023 by the global consultancy taking the views of more than 12,000 consumers from across 12 countries, namely Australia, Brazil, China, France, Germany, India, Netherlands, Singapore, Spain, Sweden, UK and US.
The standout was that current perceived price-value positioning leaves little headroom for straightforward price increases. The study also warned that price increases without also increasing perceived product value were also increasing the view that product value could be costly for both global and local streaming providers, leading to risks of cancelations in a competitive market.
Most subscribers expect streaming prices to rise next year, particularly for Netflix for which 71% expect a price increase. Up to 40% of subscribers were said to be considering cancelling streaming subscriptions within the next year, even before considering price increases. A further 16% of subscribers would consider cancelling if prices increased by up to 10%.
Global players Netflix and Disney+ are the only players for which subscribers perceive that prices reflect the product value, other players are shifting out of line in the price-value relationship, especially Apple TV+ which is situated farthest from the ‘consistency corridor’.
Apple TV+ users were by far the most likely to consider leaving with 37% indicating that they are likely to cancel their subscriptions within the next year – likely due to Apple’s price increase in 2022, the service was seen as offering poorer value for money than its competition. As such, Apple TV+ has approximately twice the expected churn compared to the other major players. Netflix and Amazon fare better, with Netflix having 16% and Amazon having 19% of users considering cancelling within the next year, while Disney+ sits at 24%.
In the UK, local players such as ITV X Premium, NowTV and All 4+ are perceived to perform similarly to each other and are only slightly behind leading providers Netflix and Disney+; they are also perceived to provide significantly more value than the likes of Apple TV+.
“With subscribers feeling that many providers are not delivering value for money, it’s more difficult than ever before to raise prices without adding real value to the offering - this is just as true for the UK’s local players as it is for the streaming giants” said Simon-Kucher partner Greg Harwood.
“Even though consumers are anticipating more price increases in the next year, hiking prices up further will significantly increase the number of subscribers considering leaving– which is why even small increases should be justified with clearly communicated value enhancements. While sentiments vary between age groups, combining streaming and gaming and adding social features look to be promising future value-adds.”
The standout was that current perceived price-value positioning leaves little headroom for straightforward price increases. The study also warned that price increases without also increasing perceived product value were also increasing the view that product value could be costly for both global and local streaming providers, leading to risks of cancelations in a competitive market.
Most subscribers expect streaming prices to rise next year, particularly for Netflix for which 71% expect a price increase. Up to 40% of subscribers were said to be considering cancelling streaming subscriptions within the next year, even before considering price increases. A further 16% of subscribers would consider cancelling if prices increased by up to 10%.
Global players Netflix and Disney+ are the only players for which subscribers perceive that prices reflect the product value, other players are shifting out of line in the price-value relationship, especially Apple TV+ which is situated farthest from the ‘consistency corridor’.
Apple TV+ users were by far the most likely to consider leaving with 37% indicating that they are likely to cancel their subscriptions within the next year – likely due to Apple’s price increase in 2022, the service was seen as offering poorer value for money than its competition. As such, Apple TV+ has approximately twice the expected churn compared to the other major players. Netflix and Amazon fare better, with Netflix having 16% and Amazon having 19% of users considering cancelling within the next year, while Disney+ sits at 24%.
In the UK, local players such as ITV X Premium, NowTV and All 4+ are perceived to perform similarly to each other and are only slightly behind leading providers Netflix and Disney+; they are also perceived to provide significantly more value than the likes of Apple TV+.
“With subscribers feeling that many providers are not delivering value for money, it’s more difficult than ever before to raise prices without adding real value to the offering - this is just as true for the UK’s local players as it is for the streaming giants” said Simon-Kucher partner Greg Harwood.
“Even though consumers are anticipating more price increases in the next year, hiking prices up further will significantly increase the number of subscribers considering leaving– which is why even small increases should be justified with clearly communicated value enhancements. While sentiments vary between age groups, combining streaming and gaming and adding social features look to be promising future value-adds.”
