Highlights:

Entertainment

Access to Smart TV’s has increased from 66% to 71% of respondents.

• Access to video streaming services subscription is stable at 74%. Netflix is still the leader, with nearly 2 in 3 (62%) having access to it.
• Disney+ continues to grow and is up by +9pp at 36%, compared to 2021.
• 20% cancelled a video streaming service in the P12M, with the main reason being that it wasn’t being used enough (33%), it was too expensive (24%) or they needed to spend less on subscriptions due to the rising cost of living (23%).

Stalled growth

• With TV the preferred device for watching long-form content, such as movies combined with the increase to access to Smart TV’s (71%), it is not surprising that access to subscription services remains strong, with 74% of respondents having access to at least one paid digital subscription service, having seen growth over the last number of years this is marginally down on prior year at 75%. On the positive side, the average respondent had access to 2.3 subscriptions services, up from 2.2 on 2022. The rate at which new subscribers are signing up is consistent with the prior year at 21% (2022: 20%) of respondents adding a new subscription in the previous 12 months, but significantly down from 25% in 2021. 
• The market is dominated by a small number of providers with Netflix remaining the most popular with 62% of respondents having a Netflix subscription, although this is marginally down in 2022 64% (2021: 65%). Disney+ continues to grow year on year from 24% in 2021 to 33% in 2022 to 36% in 2023. 
• Conversely, cancellation rates in the previous 12 months continue to increase from 20% in 2022 to 24% in 2023. The primary reason for the churn remains the lack of usage at 33%, up 2 percentage points in 2022. Unsurprisingly cost was the second reason for cancelling subscriptions. • However, the re-subscription rate has increased to 16% from 12% in 2022. Overall, however 41% of users did not change their subscriptions in the current year, which is consistent with the prior years.

John Kehoe, Partner, Consumer & Technology Business audit and assurance group, said:

Focus on profitable growth.

• Based on Deloitte’s TMT Predictions, in 2024, streamers are expected to charge more for premium content, fight churn with longer subscriptions, and satisfy bargain hunters with more pricing tiers.
• More than a decade into the streaming video revolution, media, and entertainment (M&E) companies seem to be realising how hard it is to recoup the historic profits of the pay TV business model. In 2024, Deloitte predicts that the combined number of subscription video on demand tiers offered by the top US providers will more than double between 2022 and 2024: from an average of four options to eight. From cheap ad-supported offerings and gated content to premium tiers with instant access, streamers are expected to shift from growth at all costs to making it easier for all their subscribers to get enough value for the price. Viewers may find it harder to wade through the options, but tiering could help them get more of what they want, and less of what they don’t. 31% of respondents would still prefer to pay a full price subscription with no ads.
• Over the last 12 months there has also been much coverage around Netflix’s restrictions on account sharing. Based on the responses to our survey only 37% (2022: 35%) of users share their account with other households. The incidence of sharing is most widespread among the youngest age group. Among the 18-24 year old respondents nearly 60% share their account. It is lower amongst the 25-34 years olds at 45%.
• However, when asked about any crackdown in account sharing just above a third (36%) would consider paying extra to keep sharing a video subscription account, while 7 in 10 would not consider taking out a second account at full price.