Video Streaming Consumer Trends

More and more users are moving towards streaming, with subscription video-on-demand (SVOD) services now exceeding pay TV. 

To investigate this, Salesforce commissioned Omdia to conduct a major research study. Their report examines streaming trends, audience behaviour, how people choose between service providers, what motivates consumers to continue or cancel a subscription, and the importance of customer service. 

We’ve highlighted some of the report’s findings below. Want more? You’ll find all the statistics and insights in Omdia’s full report.

Which types of streaming services are performing best?

There are various types of streaming services:

• OTT video – Over-the-top video is the general term for standalone video streaming services, available via the open internet direct to consumers.
• VOD – Video-on-demand is either transactional (buy or rent), subscription-based, or free. If free and without adverts, it’s known as FVOD (free VOD). If free but funded by advertising, it’s called AVOD (advertising-based video-on-demand).
• SVOD – Subscription video-on-demand is the model used by the likes of Netflix and Amazon. Although subscription-based, it typically involves a “contractless” agreement that allows users to cancel at any time. SVOD models are generally low-cost, provide access to large catalogues of films and TV series, and are paid monthly.
• vMVPD – Virtual multichannel video programming distributors are standalone online video subscriptions available for a monthly charge that stream pay TV channels over the internet. These are often referred to as cable TV replacement services.
• SLIN – Subscription linear is a particular type of OTT video subscription service that streams live or linear TV channels, often in combination with VOD libraries of content. SLIN includes services run by traditional linear TV operators, such as Hulu, HBO, or NOW.

Within SLIN, there are three types of services:

1. Pay TV SLIN – Streaming services that replicate traditional pay TV over the internet.
2. Sports SLIN – Providers that broadcast live games directly from services such as NFL, or sports aggregators such as DAZN.
3. D2C SLIN – Direct-to-consumer own-brand streaming services, such as Showtime or Disney+, which primarily stream in-house content.

Current video consumption trends benefit some types of streaming services more than others.

The big winners are OTT and SVOD. These services are growing because of their wide range of content, and the fact that many households use more than one service to meet different members’ needs.

With many competing streaming services and different content available on various platforms, consumers tend to stop and start new subscriptions once they have watched a particular series. Most users tend to have one permanent streaming service and then interchange between secondary services. Interestingly, they tend to stick with SVOD despite their “contractless” agreements. Users may not be tied into a contract, but they remain loyal to one SVOD. The streaming providers that can become a household’s permanent service will benefit the most from current SVOD trends.

Why users are moving towards streaming services over pay TV

After more than a decade of online video, video streaming has rapidly evolved into a mass-market industry. By 2024, it’s estimated that there will be 1,300 million OTT video streaming subscriptions, in comparison to less than 1,100 million subscriptions for pay TV.

Users are increasingly moving towards streaming services over pay TV for many reasons, including:

• It’s easier to enter and exit a video streaming service than pay TV contracts
• The ability to buy services depending on the content they want to watch at that moment — whether that’s a genre-specific subscription or a particular series
• The launch of new major services, such as Disney+, HBO Max and others that have rolled out internationally

Another reason streaming service subscriptions are growing is that consumers no longer have just one OTT subscription. A key opportunity is that consumers are evolving from single-service buyers to seasonal multi-subscription buyers. While this will increase the risk of seasonal churn, households having more than one subscription is also an opportunity for growth. At the moment, US households have 2.4 services, while the UK, Japan, and most Western European markets have an average of 1.7. By 2024, this will grow to 2.9 in the US and 1.9 internationally.

Encouraging users to stay with your service

Despite the growth of streaming services, Omdia reported that 20% of survey respondents were considering cancelling one or more of their services within the next 12 months; with this figure being higher in EMEA (24%) than elsewhere (Americas 16%, Asia 18%). So, what can streaming providers do to stop users from cancelling?

The three main reasons behind subscriber churn are:

• Content (general content fatigue, or a shortage of new content to watch)
• Costs (too expensive, or cutting down on expenses due to having multiple streaming services)
• Technology (buffering, poor picture quality, a complicated service, or inability to watch on all screens or devices)

Addressing these issues is key to keeping subscribers.

Content is king, so ensuring there is plenty to watch is critical. Encouraging subscribers to watch series rather than films is a good tactic to reduce churn.

18% of consumers who were considering cancelling said they would stay if given a discount, so pricing tactics are also an effective way of keeping people on board.

As for technology, some of these issues may resolve themselves with 5G connectivity set to make buffering a problem of the past. But having good customer service is essential so that any issues can be resolved.

However, some subscribers will cancel no matter what. Those in American and Asian markets are more likely to be persuaded, with only 13% of Americans and 12% of Asians saying they will not change their mind. But this number is significantly higher in EMEA, with 41% saying there is nothing a service can do to make them stay.

The key in EMEA is to stop users from contemplating cancelling. One of the main reasons subscribers cancel is because they “don’t use it enough”. Streaming providers need to capture people’s attention — and keep it. It’s not enough to entice new subscribers with a free trial — they need a consistent supply of enjoyable content, industry-leading technology, and excellent customer service.

To find out more about the latest video consumption trends and what this means for streaming providers, download Omdia’s full report.