November 15, 2023 – Streaming services are raising their subscription rates, cracking down on password sharing, and looking for ways to diversify their revenue streams including a focus on ad-supported offerings. Additionally, after years of strong consumer demand and numerous streaming launches, the market has become saturated. With the pressure to increase revenue, streamers have shifted their focus to a different set of KPIs, including ARPU, churn, and profitability.
“Companies have pivoted from chasing subscribers to chasing profits. The subsidy era has ended, and consumers are entering a new age of streamflation,” said KPMG U.S. Media Leader Scott Purdy. “It’s easy to imagine a scenario where most streaming services cost upwards of $25 per subscription.”
In the face of streaming price hikes, and tightening monthly budgets due to inflation, subscribers are feeling the squeeze as they continue to juggle multiple subscriptions. Many are taking a second look at how much they’re spending on their streaming subscriptions and paring back.
To better understand the impact of current economic conditions on consumers’ entertainment choices, and to gather their opinions about subscription pricing trends, content options, and the impact of the Hollywood strikes, KPMG surveyed more than 1,000 people across all age groups.
“Extended agreements would be a positive for streaming providers because long-term contracts would reduce subscriber churn. As for consumers, they would benefit by getting a lower price for the same service,” continued Scott.
“The dynamics of streaming subscribers are often unpredictable. There’s one segment of the population that is relatively resilient and tends to be more loyal to their favorite streaming platforms. Others are used to bouncing around frequently. With the production delays of the last several months, consumers may be in for a much longer gap in content than they anticipate, which may lead to more churn than anticipated,” said Purdy.
To view the full 2023 KPMG Media Survey, please visit: https://kpmg.com/us/en/articles/2023/consumers-loyal-to-streaming-what-price.html
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