There are roughly 817,000 unique and different programs available via streaming services in the U.S. The median streaming household pays for three to four such subscriptions costing between $20 and $30 per month. Most consumers claim the choices are overwhelming and cumulatively expensive, so why don't they plan to do anything about it?
Those were the findings of a Nielson report titled "State of Play" published in April 2022 that analyzed the state of streaming entertainment in America. The number of programs (movies, series, specials, etc.) has increased by 26.5 percent since the beginning of 2020.
The amount of content that we couch potatoes have consumed has also increased by 18 percent since 2021. To put that in perspective, in just one month (February 2022), Americans consumed 169.4 billion minutes of content. Obviously, there is a strong correlation between the amount of content available, and the amount we consumed.
Personally, there isn't a day that goes by that I am not bombarded with ads on television, radio, the internet, and emails from one streaming service or another. Most of them promise a week or so of free viewing and then automatically bill me each month via credit card for as long as forever. Honestly, when I examine the offerings, I discover that much of what they offer is old shows and series with one or more new series thrown in that were popular once upon a time.
Nielson says almost half of all users they surveyed felt overwhelmed by the quantity of programming available. I concur. My list of shows on the four services I subscribe to continues to build to the point that it would probably take me a year of constant binging to get through it all!
So, with all of this content, you would think that I would cut back, discontinue a service or two, and save some money. But true to form, no matter how much I complain, I have no plans to cut back, or reduce the amount of streaming content I consume each night. And that is exactly what most of those surveyed by Nielson said as well. A full 93 percent of respondents said they planned to either keep the streaming services they had or add more over the course of the next year.
If you asked me right now how much I pay a month and over the course of a year for my subscription services, I couldn't tell you. How about you, can you even guess? It turns out that almost a third of U.S. consumers underestimate how much they spend on subscriptions by $100 to $199 per month, according to a study by market research firm, C+R Research.
It is also true that many people (42 percent) have forgotten that they are paying for a streaming service that they no longer use. I am guilty once again. My wife and I enjoy foreign films, so about four months ago, we decided to fork over another $6.99 a month for a British service. We watched maybe one or two shows and that was it. Because we charged the fee to our credit card, the amount was automatically debited, making it easy to go unnoticed. Since 86 percent of consumers have at least some, if not all, of their subscriptions on autopay, I suspect many readers have similar experiences. TV and movie streaming came in third, after mobile phone and internet charges as the most forgotten types of subscriptions.
Way back when, if you recall, cable companies offered preset packages to subscribers that included several premium services in addition to network television for a bundled price. In a similar move back to the future, many of Nielson's surveyed consumers (64 percent) said they would be interested in bundling competing streaming services to save money if they could choose the streaming services they want. It seems to me that as winners and losers begin to become apparent among streamers some sort of bundling will make economic sense. In the meantime, I will probably continue to complain about, pay for, and accumulate additional services.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at firstname.lastname@example.org.
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