Growth of Streaming Services in the U.S. Is Slowing, Finds Report
The amount U.S. consumers spend on streaming services, such as Netflix and Amazon Prime, is still growing, but 2016 marks the first time the field's growth will be less than that of the previous year.
In 2016, U.S. consumers will spend $1.19 billion more on streaming services than they did the previous year. In 2015, they spent $1.21 billion more than they did the previous year. This data comes from market research company Strategy Analytics.
“Although the change in increase is relatively small, its direction is extremely significant,” says Michael Goodman, the digital media director for Strategy Analytics.“It shows that, whilst actual market saturation is a few years off yet, the domestic U.S. streaming subscription market is now on the backside of the adoption curve. The incremental increase in annual dollar spend will decline from here on.”
So where is the saturation point? Strategy Analytics says that 60 percent of broadband-enabled U.S. households now subscribe to a subscription video-on-demand (SVOD) service. Saturation will occur at 85 percent, it predicts, which is where pay TV saturation took place.
Netflix is the clear SVOD leader with 53 percent of all subscriptions. It's followed by Amazon Prime with 25 percent and Hulu with 13 percent. Additionally, 40 percent of households that subscribe have two or more subscriptions.
Streaming use is high: Over 9 in 10 SVOD subscribers user their accounts weekly, with a third watching between 1 and 5 hours of video.
In its latest quarterly report on the pay TV industry and online viewing, Digitalsmiths finds that large channel lineups can be a liability.