Global Streaming Revenues Will Increase by 14% in 2023
by Frankie Karrer
3 Min Read
Are higher prices and password crackdowns putting Connected TV at risk of ‘cord cutting’ behavior? Here’s what the industry (and insider experts) have to say.
3 Min Read
Cost cutting, budgeting, penny pinching—whatever you want to call it—has spared no prisoners in this economic climate. And, while Connected TV usage continues to grow year over year, consumers are being more mindful of which networks deserve their hard earned dollars amid price hikes across the board. The newest addition to the price hike pack is YouTube TV, who raised their monthly subscription from $64.99 to $72.99 last month. This wave has consequently forced many viewers to reconsider their streaming alliances, with 39% percent of viewers having canceled a service in the last six months, while 55% subscribed to a new service. Ad-supported options may help to soften the blow for cost-conscious viewers, and open the floodgates for advertisers trying to reach viewers on these networks. However, the question remains—will we see a ‘cord cutting’ type of behavior play out on streaming services?
When Netflix finally cracked the whip on password sharing in February—it left many reeling, and both viewers and advertisers wondering how this will potentially change streaming habits. Well, the verdict is in—a recent survey by Forbes revealed that 35% of respondents would cancel Netflix if prices go up and password-sharing is enforced—that’s 80 million subscribers out of its 230 million global subscribers, which is their 2019 subscriber base.
Furthermore, CNBC brought up some viewers’ concerns surrounding Netflix’s password sharing crackdown, including college students who might not have the money to spend on their own subscription, or low income families. “Without Netflix, I would have to find a way to compensate for classes [as I use my mother’s account for my classes], but the only other way I could compensate would be going to another streaming platform.” Ultimately, this will affect those who don’t have the budget for their own full subscription, but lower-cost ad-supported offerings are making it more affordable to the masses. A Hub Entertainment Research study revealed that the majority (57%) of viewers would rather watch ads and pay $4 to $5 less per month for a streaming service. Luckily for Netflix, brand loyalties lay deep—the majority (43%) of Forbes survey respondents would still pick Netflix if they had only one service to choose from.
One other way of getting around these price hikes? Free trials (sometimes with multiple email accounts) is one well known hack circulating around the MNTN newsroom, among others. For those viewers drowning in overload bias (the Forbes survey revealed that nearly 50% of people pay for streaming services they don’t use), utilizing a resource like Reel Good can help filter down which streaming networks to remove or keep. It essentially works as a content library where viewers can search, browse and get recommended movies and TV shows from over 150+ sources and find out which networks are screening them.
If anything, resources like these put a spotlight on CTV’s market fragmentation, and make a bigger statement about ad-supported streaming’s utility as viewers try not to put their eggs all in one basket. A research report from equity analysts from Wells Fargo predicts that these price hikes or password sharing initiatives will end up being standalone subscribers in the long run (40% of password lendees will convert from account sharers to new subscribers), while on the network side, 59% of respondents think a hybrid ad-supported plus a premium subscription based model is the way to go to lower the price of subscriptions and provide more choice for viewers and mitigate any potential ‘cord cutting’ behavior. Given streaming’s solid grip on overall TV viewing, we’d say it’s a safe bet.
Other CTV News You Need to Know:
Subscribe to the report Apple, Amazon, NBC and more use to get their CTV news.