Hollywood’s streaming business is on the brink of catastrophe while price hikes continue to push more American subscribers away.
Streaming video services are facing a number of problems, including high costs, high churn rates, and competition from other platforms. Meanwhile, a slew of U.S. customers are wondering if paying for their subscriptions is even worth it, Variety reported.
The average U.S. household pays a total of $61 per month for four streaming video entertainment services — which is up 27 percent from $48 per month last year — according to an annual study by Deloitte.
The study suggests that price hikes could be near their breaking point, as just over one-third of survey respondents (36 percent) said the content found on streaming video services is not worth the price.
Meanwhile, nearly half of respondents (48 percent) said they would cancel their favorite video on demand service if their subscription price is increased by even $5 per month.
With regards to churn, the number is high, but is a little less than what it was last year, with 40 percent of consumers saying they canceled a subscription for a video streaming service in the past six months — which is down from 44 percent last year.
The Deloitte survey also found that 67 percent want a streaming bundle so that they can access content across multiple services, while 63 percent said they want a bundle of services that they can customize every month.
Social media was also a factor in the survey, with 60 percent of Gen Z consumers saying they prefer watching user-generated content videos, noting that a perk to this is not having to spend time searching for what to watch.
More than half of Gen Z and millennial consumers also said that they get better content recommendations from social media than from the streaming services themselves.
About 49 percent of Gen Z and millennial respondents also said they watch TV shows and movies after hearing about them from creators on social media, with 54 percent saying ads on social media influence them the most.
“Delivering great content is no longer enough — curating a more personalized experience designed to better match content with personal preferences and interests is the next step,” Jana Arbanas, vice chair and Deloitte’s US Telecom, Media and Entertainment (TM&E) sector leader, said.
“It’s important to recognize that social media is the primary way people discover and get excited about entertainment,” Arbanas added.
“For content to resonate and drive engagement with consumers, streaming video providers should work to ensure their content connects with their diverse audiences and fosters a sense of community and social connectivity,” Arbanas said.
You can follow Alana Mastrangelo on Facebook and X/Twitter at @ARmastrangelo, and on Instagram.
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