Streaming gains have been driven by several factors, including the pandemic, the debut of new services and the decline of Pay TV
Streaming services continue to gain steam at the expense of cable and satellite providers.
New data shared by Ampere Analysis shows Americans who have at least one streaming subscription are subscribing to more streaming services in 2020 than they did a year ago.
Between January and March, the latest quarter Ampere tracked, the average U.S. streaming household subscribed to 3.3 streaming services — up 27% from the same time last year, when Americans subscribed to 2.6 services on average. The average U.S. household is also paying $34 per month to stream, according to Ampere, up from the $30 per month customers were spending during Q1 2019. The increase especially jumps out when considering streaming subscriptions actually took a slight dip during Q1 last year — raising questions over a possible “subscription fatigue.”
What’s behind the big growth? One factor is the debut of several major streaming services.
“The increase is driven primarily by the launch of Disney+ in November, with some additional growth from Apple TV+,” Ampere Senior Analyst Toby Holleran said. “The Disney+, Hulu and ESPN+ bundle has also proven successful; we expect around 10-15% of Hulu subscribers to be taking the three-service bundle.”
Some of the spike can also be attributed to the coronavirus pandemic, which forced millions of people around the world to spend a lot more time sitting on the couch, watching TV. Netflix, for example, added nearly 16 million new subscribers during Q1 — easily trumping the company’s previous record for a single quarter. The streaming giant, in its letter to shareholders, said that it had seen “temporarily higher viewing and increased membership growth” coinciding with widespread stay-at-home orders.
Roku, meanwhile, reported its customers watched more than 13 billion hours during Q1 — up 49% from the same time last year and equal to having each of its accounts spend 3.75 hours streaming content each day.
Cable and satellite providers haven’t enjoyed the same boost. In fact, the Pay-TV industry suffered its biggest quarterly loss ever during Q1, with more than 2 million customers ditching their service. Soaring unemployment contributed to this, but streaming services were able to avoid the same cancelations because they cost much less than even the most affordable cable and satellite packages.
“Given the unfortunate rate of U.S. unemployment the rising cost of Pay TV, the current lack of live sports and much cheaper OTT alternatives, we expect that rate of cord-cutting to materially accelerate in the coming quarters,” MoffetNathanson analysts wrote in April.
In short: streaming has never been more popular. And the trend of streaming’s rise at Pay-TV’s expense is primed to continue, as new services continue to hit the market. Quibi, Jeffrey Katzenberg’s new mobile-only service, debuted in April, and HBO Max just debuted last week. On top of that, NBCUniversal’s Peacock is set for its full rollout this summer. Even if the three services fail to reach the same heights as Netflix, Disney+, or even Hulu, they still offer viewers more options.
Ampere projects the 3.3 subscription figure may already have rocketed higher during Q2.
“Due to the increase in OTT use around the pandemic, as well as the recent HBO Max and Quibi launches, I feel this figure could be closer to 4 subscriptions per household now,” Holleran said, “although with many consumers already being converted and the 90-day free Quibi trial, the average spend per household won’t have increased much yet.”
Tim Baysinger contributed to this report.