For video streaming services, 2020 was a banner year. With movie theaters and live entertainment largely shut down and travel and dining options limited, consumers found entertainment close to home. But as they feel more confident about re-engaging with the plethora of pre-pandemic entertainment choices, their reliance on streaming video might well wane. So what trends should TMT companies watch for?
We already know that time spent streaming increased by almost 75% in 2020. We also know the number of streaming subscribers in the US doubled — from an already impressive base of more than 125 million.
A pretty sunny picture of consumers’ video experience emerged from our survey. More than four out of five respondents (83%) were well pleased with their options, up from 73% a year ago. A significant portion — around 40% — described themselves as “happy,” “excited” or “satisfied” with their video viewing experience. And consumers kept their cable TV subscriptions, pausing an earlier downward trend.
But we also learned that customers are increasingly calling the shots. To keep satisfaction levels high as streaming services proliferate, we believe TMT companies should be laser-focused on the customer experience, fueled by data that allows them to engage contextually with each customer as a “segment of one.” In fact, we expect customer-centricity to be the theme that drives growth for years to come.
Around 40% described themselves as “happy,” “excited,” or “satisfied” with their video viewing experience.
In 2020, more than two-thirds (68%) of US households maintained their cable TV subscriptions, the same share as in 2019. But these same consumers also spent time with streaming video, watching subscriber supported video-on-demand (SVOD) almost twice as often as ad-supported (AVOD) content (62% versus 32%). In 2019, survey respondents used, on average, slightly more than 6 streaming services, a total that grew to almost 8 in 2020. Pay TV subscribers aged 35-49 showed the strongest inclination to use additional services.
Consumers accessed content on a variety of devices, either directly, through apps or through content aggregators such as Amazon Prime, Apple TV, Roku, and others. And they have an enormous variety of content to choose from. With all of these choices and options, it would be reasonable to expect winners and losers in the streaming wars; consolidation will continue to change the landscape.
Following the launch of Disney+ and Apple TV+ in 2019, consumers saw the introduction of HBOMax from WarnerMedia, Peacock from NBCUniversal, and Paramount+ from ViacomCBS in 2020, and Discovery+ in 2021. Each attracted tens of millions of subscribers in a matter of months.
Our analysis shows that breadth of content still is the major factor consumers weigh when choosing a streaming service. When asked what they liked about their favorite services, “ease of use” was the most influential factor, and “I know I’ll always be able to find something to watch,” outranked the quality of content.
This speaks to the importance of a clean, intuitive user interface (UI) that understands consumers even better than they know themselves. Streaming services are already making headway on UI; as consumers juggle multiple services, it will take on increasing importance. The ability to delight customers and exceed their expectations can be a crucial differentiating factor.
Nearly one-third (31%) of survey respondents, for example, said that easy, personalized content recommendations would be a reason for staying with a streaming service. Even amid the generally favorable view of video entertainment, 29% of respondents said they were often “frustrated” or “overwhelmed” by the array of choices on offer.
To avoid such frustration, streaming services may need to kick their recommendation algorithms up a notch, perhaps through more seamless integration with social media platforms, gaming networks, and other hubs of digital consumer experience.
The importance of advanced personalization can be seen in survey respondents’ wish list for better content discovery that includes viewing recommendations based on factors such as mood, length of content, who they are with, and what content they are currently watching.