Video streaming has neared saturation, making retaining subscribers the new key to success, according to a new report from Kantar.
In its Entertainment on Demand Q4 2023 US Barometer Report, Kantar said by December, 123 million U.S. households — or 95% — had at least one video-on-demand service.
Over half of U.S. households use a free ad-supported streaming TV (FAST) platform in the average week.
But the growth of both FASTs and ad-supported VOD (AVOD) slowed during the fourth quarter, despite Cyber Monday deals offered in November.
“With near-total market saturation, streaming services are finding it harder to win new users,“ Kantar said. ”Instead, services are looking for ways to add value to their offering in order to retain their subscriber base and prevent churn. Streaming services can no longer compete on only the newest title releases. They must provide additional value to keep users engaged.”
Also Read: For Streamers, Not All Churn Is Bad, New Research Finds
Value for money is seen as the most important factor driving new video-streaming signups, surpassing specific content for the first time, Kantar said.
With subscription prices going up, diversifying the content offering is one way for services to attract and hold onto subscribers. Prime Video, Peacock and Max are offering sports or news content. (Netflix also just acquired rights to WWE’s Raw.)
Kantar noted that viewer perception of content improved in Q4 as the writers and actors strikes came to an end. New content and content variety drove a greater share of signups in Q4 compared to Q3.
Other findings in the Kantar report included:
- Apple TV Plus, ESPN Plus and Prime Video saw the greatest absolute growth in subscriber share over the quarter among paid VOD competitors, aided by promotions, trials, and holiday spending.
- The No. 1 go-to streaming service for content discovery continues to be Netflix, but Hulu and Max gained share as the Nos. 3 and 4 spots, respectively, in Q4.
- Yellowstone on Peacock was the most-watched SVOD title in Q4, followed by Netflix’s Virgin River and Loki on Disney Plus.
