Streaming penetration in the UK reached 87 percent in March 2022, highlighting the popularity of AVOD services in the face of the recent wave of paid subscription cancellations, according to figures released today by Netgem and Point Topic.
The findings show pay TV bundling around 45 percent, down approximately 15 percent from this time last year. Ad-supported subscription services are filling the void vacated by cord-cutters, especially PSB BVOD services and YouTube, which has the largest proportion of frequent viewers at 70 percent of British 25-34 year olds.
The study also points out “a growing disconnect between premium services subscriptions and usage,” suggesting confusion among viewers caused by “the fragmentation of content.” A report by Kantar found that while British households subscribe to twice as many streaming services (2.4 on average) compared to three years ago (1.2 on average), usage of those platforms has only risen by 15 percent.
Forgotten streams
Uptake of streaming services appears to be accelerating faster than viewers can watch all that extra content. As Netgem observes: “It is now increasingly common that viewers subscribe to streaming services they won’t end up watching because they have no interest in it anymore or because they forgot they once subscribed to it.”
For Chris Carey, Head of Music, Media and Entertainment at Opinium, the failure for consumption to keep up with subscription growth is unsurprising. “Time will always be the limiting factor, and the pursuit of additional subscriptions reflects the desire for higher quality viewing rather than a greater volume,” he said. “The current economic context means people will look to reduce unnecessary expenditure. You would expect people to consider dropping their least valuable subscription quite quickly as budget constraints start to bite.”
Studies in the US show the consumer frustration caused by ongoing content fragmentation, with Horowitz revealing last year that 44 percent of customers say they “often have a hard time finding something to watch.” As Netflix subscriptions fall amidst increasing costs of living, Netgem identifies clear opportunities for ad-supported services that “lower the artificial barriers to quality PSB content.”
In the UK, tolerance for advertising on streaming platforms is on the rise, widening the scope for AVOD penetration. Ampere Analysis reported in 2019 that the more services customers subscribe to, the more likely they are to agree with the statement: “I don’t mind seeing advertising when I watch TV.” For households with three subscriptions, 39 percent say they don’t seeing mind advertising – climbing to 44 percent at four subscriptions and 54 percent for those with five or more.
