Media & Internet | 2Q23 Video Survey Takeaways

1. The average SVOD subscriber takes ~4.2 services, down from ~4.7 and ~4.8 in 1Q23 and 4Q22, respectively

2. ~50% of respondents would subscribe to a standalone ESPN product

3. ~70% of Max (HBO Max) subscribers are aware of the rebrand

4. Netflix borrowers likely to become Subscribers/Extra Members

5. Disney+ and Netflix exhibit the highest levels of password sharing behaviors among major streamers

6. Subscriber stickiness increasing as platforms mature

7. Disney+ bundle take-rate down 5% sequentially

8. General preference for cheaper, ad-supported tiers is decreasing

9. SVOD penetration rates for major streamers are falling

10. Overall linear (cable + vMVPD) take-rates are holding stable

11. ~48% of respondents went to the theaters in the last 3-6 months

12. ~32% of respondents use a FAST service with intent to maintain or increase consumption levels

13. Maximum willingness to pay is holding stable 14. Connected TV is more commonly used than smartphone in 2Q23

We recently conducted our sixth video streaming survey. In 2Q23, we surveyed 1,041 adults in the U.S. to better understand television, movie, and other video consumption/subscription trends in and out of the home.

• After the second sequential step down the average SVOD subscriber now takes ~4.2 services in our 2Q23 survey, the lowest level since 3Q21

• Softer content slates at major streamers including the end of seasonal sports tailwinds, broader price increases, and further platform maturity could explain consumers slimming down their SVOD services of choice.

• ~48% of existing cable subscribers today would not subscribe to a standalone ESPN.

• ~46% of respondents without an existing linear subscription today would be willing to pay for a standalone ESPN product.

• ~31% of all respondents would only be willing to pay <$20 monthly for a standalone ESPN product while 19% of respondents would be willing to pay >$20.

• ~50% of the total respondent pool would not be willing to subscribe at all.

• ~70% of respondents that were willing to subscribe currently report using some form of linear television today (cable and/or vMVPD).

• 70% of respondents that report subscription to Max (HBO Max) say they are aware of the rebrand, while ~50% of the total respondent population report awareness.

• The service’s penetration of 25% in 2Q23 was the lowest reported of any of our prior surveys, which we attribute to the softer content slate, price increase of the service in January, and less marketing ahead of the Max rebrand.

• ~70% of total respondents are aware of Netflix’s recently implemented account sharing restrictions.

• Despite ~52% of total respondents reporting a Netflix subscription, ~76% of total respondents report using the service.

• Among those that report using the service, 63% claim to pay for the service and not share outside of the household while 37% claim to share passwords in some form.

• With sharing restrictions, ~65% of borrowers will start their own subscription or believe they will become Extra Members; 39% of borrowers intend to start their own subscription; 26% believe they will become Extra Members.

• 45% of sharers would not change their subscription due to Paid Sharing & only 15% are willing to pay for an Extra Member.

• Prime Video (71%), Discovery+ (69%), and Paramount+ (69%) show the highest % of subscribers that report paying for subscription and not sharing the password with someone else; while Max (57%), Peacock (58%), and Disney+ (59%) are the lowest.

• Disney+ (36%), Netflix (37%), and Max (33%) exhibit the highest % of subscribers that report some form of password sharing behavior.

• Prime Video (61%), Netflix (57%), and Hulu (57%) have the highest percent of subscribers that report they will not cancel subscription; Starz (38%), Showtime (43%), and Discovery+ (50%) have the lowest.

• Among major streamers, Paramount+ saw the highest increase in average stickiness while Disney+, Prime Video, and Netflix all remain relatively stable Q/Q.

• In 2Q23, 19% of Disney+ subscribers report taking the full bundle, down from 24% in 1Q23.

• ~14% of respondents who subscribe to at least 1 Disney DTC service report taking the full bundle, down from 18% in 1Q23; Disney+ and Hulu remains the most popular combination among users of the Disney ecosystem.

• The decrease in bundle activity may be attributable to the recent price increase as well as lower ESPN+ penetration, which could be driven by the relatively softer sports calendar when compared to prior quarters.

• 46% of subscribers report that they would subscribe to a cheaper tier with ads, down from 53% in 1Q23; 43% of subscribers report that they prefer a premium tier without ads, up from 35% in 1Q23.

• Awareness of Netflix’s ad tier appears to be higher than Disney+’s.

• Although early, a decrease in the general preference for ad tiers could suggest consumer frustration with advertising breaks.

• Penetration rates of the total respondent pool for Netflix, Hulu, Disney+, Max, and Peacock are down Q/Q while Paramount+ and Apple TV+ are relatively stable.

• Among SVOD users, penetration for all major streamers decreased as evident by the lower number of services per respondent. Again, Paramount+ and Apple TV+ outperform the peer group.

• 64% of total respondents report subscribing to at least one form of linear television, down slightly from 66% in 1Q23.

• The overall linear take rate is >50% for every age group and household income bucket in our survey.

• ~48% of all respondents report having seen a movie in theaters within the last 3-6 months, down slightly from 52% in 1Q23; ~59% of respondents in 2Q23 report they plan to see a movie in theaters within the next 3-6 months.

• Younger respondents reported a higher theater visitation rate; 73% of respondents within ages 18-24 and 57% of respondents within ages 25-44 reported seeing a movie in theaters within the last 3-6 months.

• 32% of all respondents report currently using a FAST service, up from 26% in 1Q23.

• 91% of FAST users indicate that they plan to use FAST services more or at the same amount in the next 3-6 months, up slightly from 87% in 1Q23.

• The average maximum amount willing to pay for any one service was $12.98 monthly in 2Q23, flat sequentially and up 2% since 4Q22.

• Households with children report a maximum willingness to pay for one service that is $3.40 more on average per month than respondents without children, nearly 30% higher.