The 12th annual survey by Deloitte of digital media trends found that the percentage of households in the U.S. subscribing to streaming services has increased to 55%. In 2017, the company said that 49% of households in the U.S. said that they subscribed to at least one video streaming subscription service.
Analysts have said that the biggest driver for subscribers when choosing the service to join is the original content offered. In the survey by Deloitte, nearly 2,100 consumers took part, and over half of the current customers of streaming services chose their service based upon the access to exclusive original content.
That is good news for Netflix, the giant amongst streaming services, with its share price doubling the last 12 months even though it says it will keep spending as much as $8 billion in 2018 for content.
The company for years has argued that its cash burn is an investment for the long term because it owns the rights in the end for all the content it creates.
Amazon has committed a reported $5 billion in 2018 for funding its growth in content.
Traditional media companies are attempting to keep pace and market direct to consumer products of their own. Disney reorganized recently its corporate structure and created a new unit that is focused on the media giant’s new streaming services.
That announcement arrived after Disney made a deal worth $66.1 billion that included debt for the acquisition of several parts of 21st Century Fox. The proposed acquisition by Disney of Fox assets will broaden the content portfolio of the company, allowing it to be more competitive.
As media companies launch their new streaming services, they reach a possible cap. It was reported by Deloitte that consumers in the U.S. are flooded already with choices. There are an estimated 200 or more on demand streaming services available in the U.S.
The consultancy said that the average customer subscribing to streaming already has subscribed to another three services. Consumers in the U.S. spend approximately $2.1 billion per month on streaming subscriptions.
Once the costs to consumers for streaming subscriptions approach their bundle price for Pay TV a slowdown could occur in growth warns analysts.
However, it is not likely that audiences would return to the traditional bundles. A survey by Deloitte found that 23% of the people who do not currently have any subscription said they never have and of those that do have subscriptions 46% said they were not satisfied and 70% said they were playing more than would they got from the service.