The Transform Technology Summits start October 13th with Low-Code/No Code: Enabling Enterprise Agility. Register now!
Consumers are loading up on digital media subscriptions, with the average subscriber having four paid video streaming services per household, two paid music services, and three paid gaming services on average. This is according to a report by accounting and consulting firm Deloitte. And Generation Z members consider video games to be their favorite entertainment choice.
A crowded field of streaming video providers is competing for audiences, and the same is true with other forms of entertainment including music, gaming, and social media. Media and entertainment companies need to address audience frustration with a fragmenting market and strike a balance between content, cost, and ad-tolerance in order to keep customers from switching platforms, said Kevin Westcott, U.S. tech, media, and telecom leader at Deloitte in an email to VentureBeat.
Video games rule Generation Z
Eighty-seven percent of Generation Z are playing video games daily or weekly on devices such as smartphones, gaming consoles and computers. A strong majority of Generation Z, Millennials and Generation X agree that during the pandemic video games have helped them stay connected to other people and get through difficult times.
Close to half (46%) say that video games have taken away from other entertainment time. For all generations, listening to music is a top-three favorite entertainment activity. Around 60% of respondents have a paid streaming music service, and the same amount have used a free, ad-supported music service.
Three top investment pros open up about what it takes to get your video game funded.
But consumers are frustrated with this market fragmentation, as 52% percent find it difficult to access content across so many services, and 53% percent of those surveyed are frustrated by needing multiple service subscriptions to access the content they want, Westcott said.
Consumers are price sensitive. Cost (46%) matters more than content (35%) for consumers deciding to subscribe to a brand new paid streaming video service. An increase in price was the biggest reason for consumers deciding to cancel a paid video, music or gaming service, Westcott said
One of the most interesting findings in the 15th edition of the report is that Generation Z (those born after 1997) members prefer music and gaming over traditional video and they are using social media as a gateway to consume all types of entertainment — behavior shifts that media companies will need to contend with as this audience gains more buying and decision-making power.
Playing video games is Generation Z’s favorite entertainment choice (26%), followed by listening to music (14%). Only 10% of Generation Z said that watching TV and movies was their favorite form of entertainment. Fifty percent of Gen Z ranked social media as the No. 1 way they prefer to get news, and only 12% selected news from network or cable TV.
“We are also seeing a high tolerance for ad-supported content,” Westcott said. “As advertising further expands into digital entertainment services, advertisers and providers need to understand changing preferences and expectations around personalization and privacy.”
Forty percent of U.S. consumers note that they would prefer to pay $12 a month for a streaming video service with no ads, versus 60% of consumers who would accept some ads for a reduction in monthly subscription costs.
And 62% of Generation Z and 72% of millennials would rather see ads personalized to their likes and activity than generic ones. However, only 40% of consumers overall said they would be willing to provide more personal information to receive advertising targeted to their interests.
Why this matters
Deloitte found a world reshaped by pandemic-driven trends, and it noted that streaming video and subscription services have revolutionized the traditional U.S. media and entertainment industry.
The online survey of 2,009 U.S. consumers, conducted in February, also revealed there is growing competition for audiences among a crowded field of streaming video providers, but also with other forms of entertainment, including music, video gaming and social media services. In this world of limitless choice, consumers can easily jump to competitors or other forms of entertainment as they weigh cost, content and ad-tolerance, making it challenging for media companies to earn consumer loyalty and cultivate enduring customer relationships.
U.S. consumers have access to multiple free and paid entertainment options that are all competing for their attention and loyalty. However, all these different options are dividing and fragmenting the market and challenging providers to understand the nuances among segments, generations, and differing kinds of media.
Overall, 82% of U.S. consumers subscribe to at least one paid streaming video service; the average subscriber has four paid video streaming services.
And 55% percent of respondents now watch a free ad-supported video service. Fifty-two percent find it difficult to access content across so many services, and 49% are frustrated when a service doesn’t make good recommendations for them. Fifty-three percent of those surveyed are frustrated by needing multiple service subscriptions to access the content they want.
Sixty-six percent get frustrated when content they want to watch is removed from a service. Half of Generation Z rank social media as the No. 1 way they prefer to get news, whereas only 12% prefer to get news from network or cable TV. Conversely, 58% of Boomers say they prefer news on network or cable TV, and only 8% look to social media first for news stories.
While more people, across generations, go to social media for news, 67% don’t trust the news they see on these services. For Generation Z, the top two activities on social media are listening to music, followed by playing video games.
Consumers are divided around the 2020 U.S. Presidential Election; 43% of respondents felt that social media companies did a good job managing misinformation, while conversely 44% of respondents felt that they could have done more.
Seventy-seven percent of respondents believe that the government must do more to regulate data collection and use. Forty-five percent said they are willing to pay for social media if it didn’t collect their data.
Sixty-two percent of Generation Z and 72% of millennials would rather see ads personalized to their likes and activity than generic ones. However, only 40% of consumers overall said they would be willing to provide more personal information to receive advertising targeted to their interests.
Forty-three percent of consumers (39% of Generation Z and 54% of Millennials) say they would associate content that included hate speech with ads that are displayed nearby.
GamesBeatGamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. How will you do that? Membership includes access to:
- Newsletters, such as DeanBeat
- The wonderful, educational, and fun speakers at our events
- Networking opportunities
- Special members-only interviews, chats, and "open office" events with GamesBeat staff
- Chatting with community members, GamesBeat staff, and other guests in our Discord
- And maybe even a fun prize or two
- Introductions to like-minded parties