Simon-Kucher’s recent Global Streaming Study reveals that consumers perceive only minor differences across offerings from dominant players such as Netflix and Amazon, and appetites for new offerings are growing
- 20-40 percent of subscribers are considering canceling streaming subscriptions within the next year, even before considering price increases
- A further 40 percent of subscribers would consider canceling if prices increased by 20 percent
- The majority of subscribers expect streaming prices to rise next year, particularly for Netflix (64 percent expect a price increase)
- Amongst key players, Apple TV+ stands out for being the only streaming service dangerously close to falling out of the ‘consistency corridor’ when measuring perceived value and price
- More than half of streamers under 40 say combining streaming and gaming would be an appealing future value-add
[September 7, 2023] -- The latest research from global consultancy Simon-Kucher into consumer streaming behavior and preferences reveals that while subscribers perceive all large players to have a price that is consistent with perceived product value, the current positioning leaves little to no room for straightforward price increases. Price increases without also increasing the perceived product value could be costly for streaming giants, leading to risks of cancelations in a competitive market.
“With subscribers only seeing minor differences between the major providers’ performance, it’s more important than ever before for streaming giants to stand out in saturated market,” said Lisa Jaeger, Partner and Global Head of Technology, Media & Telco at Simon-Kucher. “Even though consumers are bracing for additional rises in costs of subscriptions in the next year, price increases pose a threat of losing droves of subscribers– even smaller increases should be justified with value enhancements. While sentiments vary by region and age, combining streaming and gaming and adding social features look to be promising future value-adds.”
Value perception – a key factor in the struggle for streaming market share
Even though respondents feel industry leaders have prices that are consistent with perceived product value, 20-40 percent say they are considering canceling their subscriptions within the next year. While the study indicates that subscribers perceive a relatively similar value delivered by each provider, Disney+ and Netflix have a slightly better perceived value than Amazon and Apple TV+.
Among the major players, Apple TV+ users are by far the most likely to consider leaving with 39 percent indicating that they are likely to cancel their subscriptions within the next year – due to Apple's price increase last year, the service is seen as offering poorer value for money than its competition. As such, Apple TV+ has almost twice the expected churn compared to the other major players. Netflix and Amazon fare better, with ~20 percent of users considering canceling within the next year, while Disney+ sits at 24 percent. These are driven by perceived differences on the most important purchase criteria:
- On a global level, Amazon is perceived to have the cheapest price compared to competition; Apple TV+ is perceived as most expensive for what it offers
- Netflix is perceived as market leader in terms of broadness and frequency of new content added to the platform
- Disney+ is perceived to have the most unique content, likely due to its exclusive film rights (e.g., Marvel, Star Wars)
- Netflix is perceived to be the most intuitive platform to use, Apple TV+ with lowest ease of use
Potential price increases threaten to drive churn rates
Most subscribers expect streaming prices to rise in the next year, particularly for Netflix (64 percent expect a price increase) but also Disney+ (57 percent), and Amazon and Apple TV+ (55 percent each).
Even though price increases are anticipated, price sensitivity is relatively high -- on top of subscribers who are already considering canceling their subscription within the next year, another ~40 percent of subscribers would consider canceling if prices increased by 20 percent.
Using value-add features to stand out in a saturated market
Combining streaming and gaming could be a promising future value-add, especially for streamers under 40 (51 percent interested in streaming/gaming crossover vs. 32 percent for respondents aged 40+). The combination is particularly attractive in India (75 percent of younger streamers are excited about a combined approach), China (65 percent), and Brazil (60 percent). Younger respondents in India and Brazil not only see most added value in such an offering, but also indicate highest additional willingness-to-pay for it, whereas respondents in Germany and Australia are the least likely to be willing to pay more for this feature.
A social feature allowing multiple accounts in different locations to synchronize and play content at the same time could also provide value. Globally, 42 percent of respondents would be interested in such a feature, and it is viewed particularly positively in India (69 percent), Brazil (62 percent), and China (60 percent).
Complete study findings are available upon request, including country splits.
*About the Study: The Global Streaming Study 2023 was conducted during May 2023 by the global consultancy Simon-Kucher & Partners. More than 12,000 consumers from across 12 countries (Australia, Brazil, China, France, Germany, India, Netherlands, Singapore, Spain, Sweden, UK, US) were surveyed on their streaming behaviors and preferences.
About Simon-Kucher
Simon-Kucher is a global consultancy with more than 2,000 employees in 30 countries. Our sole focus is on unlocking better growth that drives measurable revenue and profit for our clients. We achieve
this by optimizing every lever of their commercial strategy – product, price, innovation, marketing, and sales – based on deep insights into what customers want and value. With 37 years of experience in monetization topics of all kinds, we are regarded as the world’s leading pricing and growth specialist.