By: Dana Feldman
Originally posted here, October 29, 2019
The streaming wars are heating up and the television landscape is about to experience one of the most disruptive periods in its history. With a half-dozen new streamers entering the market, many wonder if the surfeit of content will exceed consumer demand.
TV Time and United Talent Agency (UTA)’s IQ data and analytics group conducted a joint study in September entitled “Beyond the Big Three” in an effort to better understand how consumers feel about this new streaming media landscape. The study focuses on awareness, purchase intent and the features and offerings that drive, or slow, consumer interest.
As an already oversaturated TV landscape preps itself for the launches of new services from Disney+, Apple TV+, HBO Max, NBCU’s Peacock, Discovery Streaming and Quibi, consumers are left wondering which services to keep, cancel and add.
The study was administered in the U.S. and in three of the four countries Disney+ is launching in November: the Netherlands, Canada and Australia. Overseas responses show some similarities, as well as important differences from U.S. consumers.
Media companies know there’s power in bringing their own content directly to the consumer via their own distribution platforms. And, as cord-cutting occurs at ever-increasing rates, this is the time. However, there is an overabundance of choices of over-the-top (OTT) streaming platforms and content. Consumers are now dealing with fatigue when it comes to their at-home entertainment.
TV Time polled its global community of over 12 million TV-tracking platform users and the joint study found a great divide in awareness of upcoming streamers, strong opinions on original versus licensed content, a prevailing perception there are too many choices of services and content, price sensitivity and various opinions on ad-supported versus ad-free subscription plans.
“In a television landscape that’s experiencing such intense disruption, we’re seeking to better understand how consumer preferences and attitudes play into it,” said Head of Content Analytics at UTA IQ, David Herrin. “It is indeed the Golden Age of Television in that there are more great shows being made, more competition for eyeballs and ultimately, greater demand for creative talent, than ever before. Research like this helps us look beyond the horizon and make more informed decisions as we work together to navigate these monumental shifts in the marketplace.”
Do You Plan To Subscribe To New Streaming Services?
Most respondents (85%) currently subscribe to more than one streaming service. How many more are consumers willing to add? Just over one-third (34%) say they don’t plan to add any new services, 42% say they’ll add one and 20% will add two. Only 4% plan to add three or more new services, suggesting the supply of streaming media will soon exceed the current consumer demand.
The new services aren’t a threat to the big three: Netflix, Amazon Prime Video and Hulu. It’s not about consumers dropping what they already have. It’s about adding – or not – to these already established favorites. Disney+ and Apple TV+ have the advantage of launching first in November. Those services launching in 2020 will likely face more of an uphill battle when it comes to attracting new subscribers as they ramp up marketing.
Is Too Much Of A Good Thing, Too Much?
Considering consumers are reluctant to add more than two new services, it’s not surprising 70% of respondents feel there will soon be too many streaming choices. Cost was the most common complaint with 87% claiming it’s all becoming too expensive. This is where the ad-supported model might gain traction with 44% saying they’d deal with some ads to save money, while 56% prefer subscription-only plans.
Other key frustrations include the need to toggle between services (67%), account setup and management (58%) and the inability to easily find content (45%). As for time, 35% say there aren’t enough hours in the day to watch all this content and 17% feel the quality of content is decreasing.
“In the age of uncut cords, content was in one spot. Today, the curation of one’s television content experience requires much more effort,” explains Herrin.
Consumers Value Library Content More Than Originals
Another area dividing consumers, which has vast implications for the entertainment industry, is the availability of library content versus original content on streaming platforms.
When asked how important library content is when choosing a streaming service, 90% said it’s “important” or “very important” and 68% responded similarly regarding original content. What is clear is Apple TV+’s lack of library content might put it at a disadvantage.
Consumer Awareness Is Key
Apple TV+ launches November 1 and Disney+ on the 12th with others set for 2020. Because of the varying launch dates next year, it’s likely there will be gaps in consumer awareness about upcoming competing services.
Awareness is a highly elastic metric that could look quite different in the future but at the time of this study, Disney+ and Apple TV+ had the highest levels of consumer awareness (88% and 63%, respectively) among upcoming services. Both are established brands with immense consumer affinity making their expansion into streaming a natural evolution.
Following are HBO Max (Spring 2020) at 37% and NBCU’s Peacock (April 2020) at 28% awareness. Discovery Channel’s service (Spring 2020) comes in at 8%. And, Quibi (April 6, 2020), which hasn’t yet started marketing its service and isn’t affiliated with an existing and recognizable media brand, is at just 5%.
Awareness is a first-step indicator to whether or not a consumer will subscribe, but because most consumers don’t intend to add more than two new services, it becomes a critical metric for the industry. This bodes very well for Disney+, which appears to be in the most favorable position with more than half (56%) of respondents saying they’re “likely” or “very likely” to subscribe. None of the other services reached 20%.
Apple TV+ has major star power in its corner. When respondents were told about the A-Listers attached to many of Apple TV+’s new original content, such as Jennifer Aniston, Steve Carell and Reese Witherspoon’s The Morning Show, the intent to subscribe jumped 10%.
Of New Streamers, Disney+ Appears Best Positioned For Success
Disney+ has the highest levels of awareness (88%) and intent to subscribe (56%) and a healthy mix of library (Disney, Marvel, Pixar, Star Wars and National Geographic) and original content. It also has the advantage of launching next month. The Disney+ bundle with Hulu and ESPN+ for just $12.99 a month is also very attractive to consumers with 53% saying they’re “likely” or “very likely” to subscribe to the bundle. Of note, families (57%) are no more or less likely to subscribe to Disney+ than households without children (55%), illustrating the strength of Disney’s adult franchises.
The fact library content registers as highly important (notably more than originals) for consumers contemplating adding a service is another positive for Disney. Moreover, 56% of consumers prefer ad-free services, which supports Disney’s subscription model.
Consumers love Disney’s library franchises, particularly Marvel (77%) and Pixar (71%) ranking the highest. Star Wars (55%) and National Geographic (33%) garner less enthusiasm. Respondents were also asked about Disney Animated Classics (64%) and Disney+ Originals (61%). Consumer affinity for Marvel is another positive for Disney+ Originals, as forthcoming new original Marvel titles on the service are highly anticipated.
The Mandalorian followed by Marvel’s Falcon & Winter Soldier, WandaVision, Loki, Hawkeye, What if? and She-Hulk are among the most anticipated Disney+ original shows. Among TV Time app users, Disney+ and Apple TV+ have 10 of the Top 25 anticipated new shows.
It doesn’t appear that Disney’s potential success poses a threat to existing services, as 70% of respondents indicate they’re not “likely” or “very likely” to drop a current service if they subscribe to Disney+.
International Consumers On The Streaming Wars
Disney+ awareness is high abroad and on par with the U.S. at 88%, further exemplifying Disney’s brand on a global scale. Awareness is 93% in the Netherlands, 84% in Australia and 82% in Canada.
Consumer preferences abroad often align with the U.S. For example, people assign a high value to library content when selecting a service (86% in all three countries compared to 90% stateside), which bodes well for Disney. Those in the Netherlands (60%), Australia (59%) and Canada (49%) prefer Disney’s paid-only SVOD business model compared to 56% in the U.S.
There are, however, warning signs for Disney. Consumers outside the U.S. are less intent to subscribe to Disney+. Percentages vary but compared to 56% in the U.S., 49% of those in the Netherlands, 42% in Canada and 38% in Australia have plans to subscribe to Disney+ suggesting that in spite of high awareness, it may require more marketing abroad to educate people on the details of the Disney+ service.
Several of Disney’s major franchises aren’t as strong internationally, including Star Wars (48% average of Australia, Canada and the Netherlands versus 55% in the U.S.) and Marvel (69% average versus 77% in the U.S.).
“While Disney+ appears well-positioned to succeed internationally, it may require additional focus in strategic markets to encourage people to subscribe,” said Vice President of TV Time’s TVLytics, Alex von Krogh. “It will be important to track how people engage with their programming from a global perspective and how that compares to competitors in those markets.”
There is disparity when it comes to consumer awareness of new streaming platforms. Because of Disney’s global brand recognition, Disney+ is at an advantage stateside and abroad. Most people prefer library content and subscription-only models. And, consumers are overwhelmed with too many choices with the majority saying they’ll add just one or two new services.
As new services launch, consumer sentiment will evolve and it’ll be imperative to understand how changes impact television’s future. “We’ve seen the industry evolve from changing channels on a single remote to switching between apps using multiple remotes and devices,” adds TV Time’s von Krogh. “As content discovery becomes more of a challenge in this environment, we need to better understand viewership patterns across platforms and how to best serve people the right content at the right time.”
So, is too much of a good thing too much? It seems so. Perhaps the future will allow consumers to purchase their entertainment à la carte; instead of subscribing to services, we might be able to order the shows and movies we want. This, of course, is just a thought.