New data from Parks Associates shows that most viewers are cutting back their budgets with ad plans, though many are also cutting back on the number of subscriptions.
Every major streaming service besides Apple TV+ offers an ad plan now, and new data from Parks Associates shows that customers are taking advantage of the savings offered by ad tiers and being more selective about their streaming choices, as the average monthly spend on streaming services has plummeted in recent years.
The new data from Parks shows that viewers have responded to the seemingly never-ending wave of streaming price increases by prioritizing which services matter most to them. Average monthly spending on streaming hit $90 per month in 2021, but the number has dropped as prices have gone up, and as of the first quarter of 2024 respondents to park said their monthly outlay for streamers was $63, a 30% decline.
Some viewers are simply canceling more services, as Parks’ data shows. The percentage of customers who subscribed to nine or more streaming services in the third quarter of 2023 reached 29%, almost one-third of all viewers. But that number has dipped to 20% in Q1 2024, though the number of viewers who subscribe to between zero and three streamers per month seems about the same in that time span.
“Consumers are spending less, but rather than go without, many are using ad-based alternatives to save on costs,” said Sarah Lee, Research Analyst, Parks Associates. “A service needs to provide unique and ongoing value if it is to charge a premium.”
Disney+ will also add an ESPN tile later this year, making a huge selection of live sports available and clearly demonstrating the “unique and ongoing value” Parks identifies as necessary for streamers to stand out.
The Parks data makes it clear that streamers like Paramount+ and Peacock — both of whom recently announced price increases on ad-supported and ad-free plans — will need to keep thinking about how to keep their services a good value if they don’t want to risk mass customer defections.
“All categories of household services face challenges, as consumers reevaluate their spending and subscriptions,” said Elizabeth Parks, President and CMO, Parks Associates. “A focus on value and education, the user interface, and the customer experience is what will drive the next generation of services in the home.”
From the article, "Average Monthly Streaming Budget Plummets 30% as Viewers Turn to Ad-Supported Plans" by David Satin
