The SVOD industry is always growing, with new services continuously being created. This sounds like a great thing, but is it? This was a question many were thinking about after the 14th annual edition of Deloitteâ€™s Digital Media Trends. It was mentioned that subscription fatigue was expected to go up, which could actually put people off SVODâ€™s.
This conclusion was made via a study. This study focused on subscriber activities before the pandemic (Between December and January), and then this was compared to May when the virus was in full flow. It was found that the average subscriber pays for four different services, which was only three before the pandemic. This study shows that around 80 percent of customers in the U.S have at least one service they are subscribed to. This was 73 percent before the pandemic.
While this may sound positive at first, Deloitte said that subscribers using that many services at once is not always a good thing. The subscriber will try to manage multiple services, which also means managing the costs that they bring. This is what Kevin Westcott, vice chairman of Deloitte, called â€œsubscription fatigue.â€ His theory is that this will cause a lot of cancellations.
â€œPeople have more time on their hands, and theyâ€™re trying new things,â€ he stated. â€œBut at the same time, we are seeing a significant amount of churn. With less money to spend, the competition for consumer attention and retention has never been fiercer. The industry canâ€™t just keep adding new paid subscriptions.â€
The study also revealed that 20 percent of customers canceled a minimum of one service in the last 12 months before COVID-19. Once Lockdown came into play, 17 percent of consumers said that they have canceled a minimum of one service already. They mentioned that high costs and discounts running out was the reason for their cancellation.
This situation is likely to give more opportunities to ad-supported streaming services. A survey conducted by Deloitte found that 47 percent of customers used one AVOD at the very least during this pandemic. Also, overall â€œcustomers want access to cheaper, ad-supported streaming video options, both before (62 percent) and since the COVID-19 pandemic (65 percent).â€