Over 350 streaming services have been tracked in North America alone, according to data from research firm Parks Associates – a vastly different market from digital video’s origins in 2007.
“The sheer number of services and [business] models is really staggering to keep up with,” Elizabeth Parks, president of Parks Associates, said during Wednesday’s webinar.
In its State of the Market: Streaming Video Services report, Parks Associates said in the past month, 31% of U.S. households reported watching an ad-supported video on demand or a free ad-supported streaming service – a 13% increase from 2018. In addition, 41 million U.S. households are expected to watch ad-based over-the-top (OTT) video services like Tubi, Freevee, and Pluto TV.
“As an industry, we are now entering a new phase of streaming characterized by evolving business models aimed at enhancing profitability,” Parks said.
Churn, or the rate of cancellations, has risen across the board, but according to Parks, churn is natural with a 47% annualized rate.
The amount of time someone spends trying to find something to watch is correlated to churn rates, according to Eric Sorensen, Parks Associates streaming video editor.
“Services have to look at ‘how do I make the discovery process a lot easier, a lot simpler’ and provide [viewers] a reason to stick around,” Sorensen said during the presentation. “If I’m going to spend 20 minutes looking for something [to watch], that’s the 20 minutes I had to watch.”
Parks Associates aren’t the only ones pointing towards consolidation as a potential solution for companies, viewers and advertisers. In its Video Trends report, TiVo said a blend of the different types of services is the best option.
“This new [subscription video on demand services and ad-supported video on demand] hybrid structure allows users to consolidate their subscriptions, cut costs and still watch the same or more amount of content,” the report said.
From the article, "Americans Are Spending Less on Streaming in 2023 As Cord Cutters Cut Back" by Shelby Brown