A survey of US streaming subscribers has found two-thirds of Netflix users view the service as “indispensable” to meeting their household needs.
Peacock, Apple TV+, Epix Now were found to be the least essential services. Disney+ and Hulu were the only other streamers in the ‘essentials’ list
“This is a one way of comparing a service’s utility with that of its competitors,” noted Michael Greeson, veteran researcher and founder of Aluma Insights. “It says to some owners you’ve a bit more latitude when it comes to revenue optimization measures, such as cracking down on freeloading or increasing retail prices. It says to others there is great risk in significantly altering prices or service terms.”
Last December, Disney increased the prices of its ad-free feed by 38%, and Aluma analysts anticipate an increase of 15% during 2023 for both Disney and Hulu.
Peacock saw sizable growth in paid subscribers during 2022, of which two-thirds consider the service inessential, which Aluma blames on library neglect. The analysts add that with the phasing out of complimentary service for Comcast’s Xfinity subscribers, Peacock will need to build value further in order to convince subscribers to renew once more.
The greater risk to less-essential services is plateauing monthly SVOD spending. Aluma found that in 2022 SVOD households spent on average $43.25 per month on the services, up significantly from 2020 but mostly stable compared with 2021. However, between 2020 and 2022, the percentage of SVOD buyers open to spending more declined from 14% to 8%, while the percentage who planning to reduce these expenses increased from 17% to 25%.