Streaming Viewers Aren’t Going Anywhere

When it comes to streaming video, it appears the COVID bump is here to stay.

BCG’s latest research into viewer behavior and preferences confirms that consumers have increased the amount of time they spend watching TV or streaming video—and that these habits are likely to continue after pandemic-related restrictions ease. More than 90% of respondents to our latest viewer survey, conducted in February 2021, said they are using at least the same number of streaming services as they would have in the absence of the coronavirus. These results are consistent with our 2020 survey and good news for the industry.

That said, individual providers still need to earn their place in the lineup. As our research below illustrates, consumers have generally subscribed to three streaming services since the beginning of the pandemic. Viewership remains concentrated in four core subscription video on demand (SVOD) services: Netflix (approximately 70% of respondents use or pay for Netflix), Amazon Prime Video (59%), Hulu (41%) and Disney+ (36%). Among the long tail of noncore services competing for the remaining attention, HBO Max has made rapid progress since its launch in May 2020, with a user penetration that is now about 20%.

There are growing indications that advertising-based video on demand (AVOD) services, such as Tubi, Pluto TV, Roku, Crackle, and Peacock, while still limited in viewership, are gaining traction quickly as consumers keep exploring available options. The increasing AVOD viewership seems to suggest that consumers are happy to try free ad-supported services, which could have longer-term implications for subscription-based companies. The top AVOD services have higher usage than many of the noncore SVOD services. Users of four or more over-the-top (OTT) services lead the charge in AVOD viewing.

Here’s a summary of the latest survey results.

The survey results suggest a few priority considerations for video-streaming companies:

• Customer retention is paramount—especially for new customers. Viewers have lots of choice. Switching is easy, and the willingness to do so is high, especially when it comes to noncore services.
• Content is still king. Viewers consistently claim that interesting shows bring them to the platforms they watch. They will keep their subscriptions if the platforms offer more content they want to watch.
• Discoverability counts. Providers need to stand out from the competition to gain attention. Viewers look to providers, as well as friends, for suggestion of what to watch next, underscoring the importance of effective marketing for providers to cut through the noise.
• Free may end up being a winning strategy. The success of AVOD services such as Tubi and Pluto indicates that, after initial skepticism, the advertising model is back. Since AVOD services don’t often win with new premium content, but instead satisfy their user base with deep video libraries, several players are offering a tiered pricing model that leads to paid, ad-free viewing. This could also be an opportunity for smaller SVOD companies to diversify their revenue streams and increase their user base.