DALLAS—U.S viewers may have finally reached their limit when it comes to spending on subscription streaming services.
In a new report from Parks Associates, the researcher reports a significant drop in spending and a declining number of services viewers subscribe to.
The firm's latest research from its Video Services Dashboard reports a dramatic 30% drop in spending for streaming SVOD services, with the average U.S. internet household spending about $63 per month on OTT SVOD services, down from $90 in 2021.
The results shouldn’t be a surprise considering the recent launch of ad-supported streaming subscriptions from Netflix, Amazon and Disney as well as the increasing popularity of FAST channels,
"Consumers are spending less, but rather than go without, many are using ad-based alternatives to save on costs," said Sarah Lee, Research Analyst, Parks Associates. "A service needs to provide unique and ongoing value if it is to charge a premium."
Households are now stacking fewer streaming services—in Q1 2024, 20% of US internet households report paying for nine or more services, vs. 29% in Q3 2023. The overall average number of streaming video service subscriptions per household has dropped below five, and 32% of households that cancelled a service in the past 12 months cite a need to cut household expenses as the reason.
"All categories of household services face challenges, as consumers reevaluate their spending and subscriptions," said Elizabeth Parks, President and CMO, Parks Associates. "A focus on value and education, the user interface, and the customer experience is what will drive the next generation of services in the home."
The results are in line with Park’s previous research last fall that reported a steep 25% decline in the number of streaming subscriptions since 2021 with nearly one-third (31%) of households having used free ad-based services by the end of 2022.
