What Streaming Audiences View and Value

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Most of us would prefer not to pay for content, but when we do it seems like movies and TV shows alone are not enough to get us to open our wallets. Every service has them, a lot of them, and they’re all relatively and equally high quality.

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According to a new survey, the winners in the streaming wars will be the companies that diversify into news, sports, video games, or preferably a mix of the lot.

The report, “What Will They Pay For? The Mind of The Modern Subscriber,” from Consumer Insights — the research division of Publisher’s Clearing House — polled 15,000 Americans and teamed with former cable network chief-turned industry consultant Evan Shapiro to analyze the results.

According to the report, the answer is movies and scripted TV (39%), trailed by sports (12%), followed closely by music and podcasts (11%). At 10%, “other” is a category to keep an eye on, the study advises.

“It is not binary. We know nothing beats free. Yet we also know that people will pay, at the right price, for the right stuff,” says Shapiro.

Among 18- to 34-year-olds, gaming jumps to 15% and music/podcasts spikes to 16%.

“It is glaringly clear is that having movies and TV shows are now, simply, table stakes,” Shapiro writes. “They are not at all a differentiator: Every service has them. In streaming TV, scripted and non-fiction TV are an expensive, hit-driven, share-shift model. Consumers of all ages and incomes will sign up for them, to binge something. But if that is all you have, they will not stick around.”

He believes trends increasingly favor the tech giants. “It’s no surprise that the two streaming players with the most data — Apple and Amazon — are both heavily invested in bundling numerous genres of services. It makes perfect sense that Microsoft, which already offers game and productivity products is getting into business with Netflix — and the likelihood of a bundle for all of them is high.”

Analyzing the survey, Deadline’s Dade Hayes observes that Netflix had recently been making significant investments in games and interactive content. “Disney has also described a larger goal of conquering not only streaming but the metaverse, possibly a tacit acknowledgement that a batch of Mandalorian-style original hits alone may not carry the day.”

“Apple and Amazon both offer films, TV, sports, audio and gaming,” Shapiro notes. “Amazon also offers free home delivery,” as “key to the lifetime value, low churn and high revenue-per-user of their huge Prime membership.”

While Disney+ only has movies and TV, a Disney Bundle offers sports, news, and even local content. “This is why their bundle churn is now lower than Netflix’s, and how they surpassed Netflix for subscribers worldwide,” he thinks.

Even Paramount+ offers TV, film, sports, news, and local content; and it recently created a bundle with Walmart, “a very significant ‘other,’ that specifically caters to the most price sensitive of subscribers.”

Shapiro believes there’s hope for the paid content business model yet. In particular, and perhaps counterintuitively, the silver lining is in youth.

He says 200 million mostly young people are paying for Spotify subscriptions and another 90 million are paying for Apple Music. Hundreds of millions of paying users are playing Fortnite, Roblox, and Minecraft.

“We have trained three generations (Millennials, Gen Z and Gen A) that (despite social media) great content is often what you pay for it. Despite their addiction to free video on TikTok, two thirds of America’s young people are ready to pay for what they feel they need.”

Shapiro thinks he’s hit upon the solution to churn: It’s bundled content, formats, and services. “If content is bundled into consumer lifestyles — with optionality and around their passions — there is a far greater opportunity to entertain and retain subscribers across their lives, without the constant threat of churning for the exits.

“Playing across genres and needs is now key to true lifetime value for your subscribers,” he insists. “Content services who want to acquire and keep subscribers every month, with low churn, must provide more than one kind of content, and/or offer more than one type of service.”