Stream Fatigue? Streaming Subscriptions Drop So Far This Year – Just as Apple, Disney Prepare to Enter Market

“Soon we’ll all start looking at our credit card bills and start saying, ‘Why am I subscribing to all of these services? Something’s got to give,'” former Warner Bros. exec Paul Hardart says

Forget about cord-cutting — the new trend in 2019 might be TV fans cutting back on their streaming service budgets.

New research from Ampere Analysis shows that Americans are subscribing to fewer streaming services in the first three months of this year — and also paying less overall. Between January and March, the average U.S. household subscribed to 2.6 services and paid about $30 per month altogether, marking a slight dip from last June, when the average household paid about $33 per month for 2.8 services.

The decline is admittedly modest so far but it’s a notable drop that comes just as Apple, WarnerMedia, NBCUniversal and, oh yeah, Disney are poised to enter an increasingly crowded streaming market within the next year. “Streaming fatigue” could be setting in as customers balk at the idea of dropping their cable and satellite plans only to juggle a half dozen different streaming subscriptions.

“Cord cutters, like me, are realizing that skinnier bundles still add up, price-wise, and how many [streaming] monthly fees can one viewer afford and navigate?” said Neil Landau, screenwriter and author of “TV Writing On Demand: Creating Great Content in the Digital Era.” “We now live in a world with over 500 scripted series, so in addition to getting noticed and breaking through the noise in this glutted TV landscape, the technologically challenged may not even be able to find a desired new show.”

Landau’s “too many choices” concern was echoed by Kevin Westcott, Deloitte’s vice chairman and head of U.S. Telecom and Media and Entertainment: “With more than 300 over-the-top video options in the U.S., coupled with multiple subscriptions and payments to track and justify, consumers may be entering a time of ‘subscription fatigue.'”

To be clear, this doesn’t mean streaming is falling out of style or that cable and satellite are poised to make a comeback. Indeed, new survey data from Deloitte this week showed that streaming has officially passed traditional pay TV in popularity in the U.S., with 69 percent of survey respondents subscribing to at least one streaming service, compared to 65 percent of respondents that pay for cable or satellite.

However, the new trends indicate that streamers are reticent to sign up for new subscriptions. Cord-cutting was intended to drop monthly expenses while still giving viewers content they desire. And the addition of more big-name services on the market doesn’t guarantee that customers will open their wallets.

Look at the prices of the already established streaming players: Netflix’s premium plan runs $16 per month; Hulu’s “no commercials” plan is $12 per month; HBO Now is $15 per month. Amazon Prime Video comes with a $120 annual Prime membership fee. And Live TV options from YouTube and Hulu hover between $40 and $45 each month. On their own, these prices don’t break the bank, but they quickly add up in combination.

“Soon we’ll all start looking at our credit card bills and start saying, ‘Why am I subscribing to all of these services? Something’s got to give,'” said Paul Hardart, former Warner Bros. and Turner executive and current head of the Entertainment, Media and Technology Program at New York University.

Making matters tougher for new streamers is Netflix’s overwhelming dominance in the market. The company has nearly 60 million U.S. customers and has built a devoted following behind trademark shows like “Narcos,” “Queer Eye” and “Stranger Things.”

The company’s first-mover advantage is real. New streamers will have a chance to carve out their share of the pie — Disney’s slew of top content, from “Star Wars” to its seemingly never-ending supply of Marvel movies, will bolster its Disney+ service, and Apple has more than $200 billion in cash to throw around if it chooses to bulk up its content offereings.

Still, it will be next to impossible for newcomers to bump Netflix from the select few services that Americans will pay for, Hardart said, leaving the rest of the field to battle for the remaining dollars customers are willing to shell out.

“There will be losers in this. Walmart basically abandoned their streaming service earlier this year,” Hardart noted, referring to the retail giant’s scrapped plans for an $8 per month service. “If a big player like Walmart is abandoning it, it’s a treacherous path.”

“We’ve almost reached a saturation point,” Ampere senior analyst Toby Holleran added of the streaming landscape. While he said the downturn in overall streaming subscriptions isn’t necessarily permanent — Holleran said the “sweet spot” for streaming subscriptions will likely land around three per household in the next year — customer loyalty will be difficult to secure. Instead, churn rates will increase, as a lack of contracts will allow viewers to nomadically bounce from service to service, binging a series or two before moving on to another service.

These key factors — price sensitivity, the ability to easily move from service to service and a finite amount of time for customers to watch all of the content that’s available — could hamper Apple, Disney and WarnerMedia’s fashionably late entrance to the streaming party.

Sean Burch

Sean Burch

Tech reporter • [email protected] • @seanb44 



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