Rising prices for streaming services are having a notable impact on the media landscape, with more users adopting ad-supported streaming services and nearly one third of cord cutters saying they might go back to cable if the price hikes continue, according to a major new survey from Horowitz Research.
Today, nearly 7 in 10 (69%) TV content viewers in the U.S. use free streaming services at least monthly, a sharp increase from 42% in 2019, according to Horowitz’s latest State of Media, Entertainment & Tech: Subscriptions 2023 study.
The new report also noted that the free services most used by consumers are Peacock, Tubi, Pluto, and YouTube.
“The data from this year’s study points to some important opportunities for both media companies and consumers,” notes Adriana Waterston, chief revenue officer and insights & strategy lead for Horowitz Research. “The adoption of AVOD/FAST services — and the concomitant increase in streaming ad revenue we can expect to see — will help offset revenue loss on the linear side, which is critical as programming costs continue to skyrocket. On the consumer side, managed services — in which subscribers can see and manage all their streaming content in one place — would be an antidote to the challenges inherent to today’s highly fragmented streaming space, and consumers seem open to consolidating their services together. It’s a matter of which companies will compete to be the managed services solution for the streaming age, between traditional MVPDs and tech companies like Amazon, Samsung, Roku, and Apple.”
The study also found that on the subscription streaming (SVOD) side self-reported total average spending on these services is now $50/month, which in turn is prompting a growing appetite for managed services to help control costs.
In one notable finding, cord-cutters were surveyed about how much they perceive they are saving now that they cut the cord. In 2019, over half of cord-cutters felt they were saving “a really good amount”; in this current study, that number dropped to 33%.
Already about 30% of consumers indicate that they pay for at least one of their streaming services in combination with another service they have (e.g., as a bundle with another SVOD, through a service like Amazon Prime, as a perk with a cell phone plan, etc.), Horowitz found.
Another notable finding is that after years of decline in MVPD subscriptions, penetration of traditional cable/satellite services seems to be remaining steady. Consistent with last year, half (52%) of TV content viewers now subscribe to MVPD services and customer satisfaction with their service overall among those subscribers is high, at 80%.
Satisfaction numbers have increased slightly over the past few years as less happy customers abandon their MVPDs for streamed options, while MVPD loyalists who derive a lot of value out of the service remain subscribed, the researchers at Horowitz said.
Notably, one in three cord-cutters (32%) say that if the cost of all their streaming services continues to increase, they might consider going back to cable.
