When things open back up
Once lockdown restrictions are lifted, consumers may reduce their subscriptions, as Deloitte found the top reason consumers added a streaming video service during the crisis was having more time to watch shows and movies. When consumers return to more normal routines, they may likely have less time for entertainment, Westcott said.
To win subscribers rapidly, many streaming video services are offering low introductory rates and free trials. But with cheap trials and easy cancellations, consumers can binge-watch their favorite shows, cancel the subscription, and then return when the next season drops — essentially, “renting” services instead of joining them.
This underscores the difficulty providers face with retention, as well as their growing focus on content libraries and original programming. When Deloitte asked consumers why they subscribed to a specific streaming video service, their answers revealed that content is still king. Consumers are drawn to streaming video services that offer a broad range of shows and movies and content they can’t get anywhere else — both originals and old favorites.
For nearly a quarter of consumers, a free or discounted rate was a big factor in choosing a paid streaming video service. To decide if they should keep the service once the full price kicks in, consumers will likely evaluate whether it delivers enough high-quality content for the new price. Indeed, streaming video subscribers are canceling more services: the pre-COVID-19 survey found that 20% of subscribers had canceled at least one streaming video service in the previous year.
In the few months since COVID-19 began, 17% of subscribers had canceled a service. When Deloitte asked consumers why they canceled, 36% said the service was too expensive. Consumers who lost income during the COVID-19 pandemic were more than twice as likely to cancel a service because of cost compared with those whose income was unchanged.
Prior to COVID-19, 25% of consumers watched livestreamed and recorded video of others playing games. For millennials and Gen Z, that number was around 50% and continues to hold strong during the pandemic.
Twitch, the top livestreaming service for gaming, has seen 50% growth in hours watched during the pandemic. For both watching and playing games, it’s unclear how much of this growth will remain after lockdowns are lifted. And yet the phenomenon of playing, streaming, watching, and socializing in and around video games will likely continue to expand after the crisis has passed, Deloitte said.
The pandemic has created conditions and opportunities for people to try new things, but will these interests fade? Or are we seeing the beginnings of new markets? During the pandemic, 38% of consumers surveyed have tried a new digital activity or subscription for the first time.
The most popular are viewing livestreamed events and watching video with others through a social platform, web application, or video conference. More than two-thirds of respondents said they are likely to continue their new activity or subscription. Media and entertainment companies may not have anticipated videoconferencing as a new form of content, but these are times of great change.
With no new live sports to watch, many fans are going elsewhere — 46% of sports viewing respondents are watching their favorite shows and movies, and 11% have been watching virtualized sporting events. Many sports and auto racing leagues have broadcast some sort of competition in a simulation of their sport.
Any content is replaceable in the consumers’ eyes, Westcott said.
“But if you have multiple members of the family using the platform for multiple types of genres of entertainment, it makes it much more sticky, and it makes people want to retain it as something for the long-term,” he said.
Westcott believes new types of creative content, whether short-form videos (like offered by Quibi) or other new programs, will be more likely to catch on now.
“I’m really hoping to see an explosion of storytelling,” Westcott said.
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