69% of consumers currently pay for some type of subscription-based video streaming service. This is creating a halo effect as consumers are comfortable adopting other types of subscription-based apps.
The Waning Years of Traditional TV
We have approached the milestone predicted years ago that streaming video will ultimately overtake cable as the preferred source for home entertainment media content. Consulting firm Deloitte reported that 69% of consumers currently pay for some type of video streaming service. The report also found that only 65% of consumers pay for traditional cable or satellite subscriptions. This is a significant increase of 10% from last year. In 2009 only 10% of consumers subscribed to internet video services.
The big three streaming services – Netflix, Hulu and Amazon Prime were joined this last year, to much fanfare, by Apple TV+ and Disney+. Both of the new streaming services are expected to attract a significant number of subscribers by releasing large-budget content that will no doubt shake up the balance. However, this second wave of streaming services, with the introduction of Apple TV+ and Disney+ will not necessarily mean the viewership pie will be sliced.
An increasing number of video streaming consumers are choosing multiple app subscriptions today to satisfy their viewing content interests. A recent survey found that most people are now willing to pay between $17 and $27 a month for all streaming subscriptions. It is no longer a matter of which streaming service to choose from. It is now how many can I subscribe to for the best value.
The trends in cable cutting from the Deloitte report shows a generational preference among consumers. When we look at millennials, 22 to 35, we see 88% who chose online streaming services while 51% subscribed to traditional cable or satellite. There is still 43% of consumers overall that pay for both services (traditional TV and Internet video services). These consumers, on average, subscribe to three different streaming services. The primary reasons why they chose online streaming services included, access to original programming (57%) and to avoid all advertising (44%).
👉Read more: Mastering Subscription Commerce for Connected TV Apps
More Streaming Apps Lead to More Subscription Apps
The dominant model for video streaming services in the United Stated remains the subscription model where a monthly fee is paid to watch video content free from ads. The competition in this market is no longer just about gaining eyeballs for advertisements, it’s about building a subscriber base that provides consistent monthly revenue for the provider. The subscription revenue vs advertising revenue debate has seen clear winners in the music and video streaming space.
This has led to app subscriptions increasing significantly in other verticals as well. Subscription gaming, identity-theft protection software, podcasts, credit reporting, antivirus tools, even SaaS solutions like Photoshop all indicate demand and increasing acceptance of the subscription model as the better option for apps and content consumers.
Subscription services are continuing to grow in markets outside just the streaming space. For app developers that want to grow and optimize a recurring revenue stream, we recommend using Nami ML. Now is the best time to publish your app with Nami, the world’s first platform purpose made to optimize subscription revenue powered by advanced machine learning. Try it for free today.
👉Subscriptions Driving Consumer Spend
