The U.S. SVOD industry – a competitive environment
Netflix has long been the SVOD market leader both in the United States and worldwide, despite rising competition. The service now has tens of millions of subscribers in the United States. However, the perception of the streaming giant took a hit in the last year. While the share of subscribers who were satisfied with Netflix amounted to 90 percent in 2021, the satisfaction rate declined by 10 percentage points in 2022. Moreover, a survey asking users about nine different streaming services revealed that Netflix saw the highest year-over-year drop in the share of subscribers who were likely to keep the platform.The entrance of Disney+ and Apple TV+ into the U.S. SVOD scene, as well as the succession of HBO Now by HBO Max, arguably disrupted the status quo. Disney+ quickly amassed a significant audience, almost doubling its global subscriber base between the beginning of 2021 and the end of 2022. Hulu and ESPN+ are also owned by The Walt Disney Company and have large audiences of their own, giving Disney serious clout and influence over the SVOD industry.
Cost becomes a key driver
While specific content, such as original and exclusive programming, had long been the most common reason for signing up for a certain platform, recent surveys showed that with more and more SVOD services raising their prices, a low subscription fee now plays a more important role. It is therefore unsurprising that people are increasingly looking for other online video entertainment options, especially in light of a looming recession. Nowadays, consumers can choose from many new and existing ad-supported video-on-demand platforms. Subscription services like Netflix and Disney+ have recently launched their own lower-priced ad-supported tier in order to retain their subscribers and increase their revenues. This trend suggests that the SVOD market in the U.S. could continue to grow, albeit driven by different monetization models.
