US streamers are leaving VOD
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Editor
| 03 November 2021
Even though the US subscription video-on-demand (VOD) market continues to expand and transform, streaming penetration in the country is down 1% points quarter-on-quarter (QoQ) to 85%, driven by the SVOD tier says research from Kantar.
Amazon Mini TV 17 May 2021
Using its Entertainment on Demand streaming measuring service, the analyst found the proportion of US households who have a video subscription has dropped to 85% - down 1% points QoQ, and up 2% points year-on-year (YoY) - meaning there were 109 million households with subscriptions as of September 2021.

The quarterly decline in video streaming penetration decline was seen to be driven by paid SVOD which declined 1.5% points. The study also showed that video streaming was shedding off its sheds off solus service subscribers and users; 85% of penetration losses in Q3 2021 were those who accessed just 1 video streaming service in the previous quarter.

Overall, 4.5 million consumers cancelled subscriptions in Q3 2021, including those who had multiple subscriptions and remain in the streaming category. But of those cancellations, 85%, or 3.8 million, were among consumers who had only 1 subscription in Q2 2021 and no subscriptions in Q3 2021.

Across platforms, Amazon Prime Video accounted for the bulk of penetration declines, losing 2 penetration points in one quarter. This comes after Amazon Prime Video accounted for the largest share of new subscription in Q2 2021, driven by Prime Day. Among the group who had one subscription in Q2 2021 and cancelled in Q3 2021, 69% had an Amazon Prime Video subscription in Q2 2021.

While SVOD was falling slightly, FAST (free ad-supported TV) and AVOD were growing tiers within the video streaming market. The study found 14% accessed FAST services, up 3% points compared with Q2 2021 and 21% accessed AVOD, up 0.8% points QoQ.

Beyond SVOD, AVOD, and FAST Streaming, Kantar said that it could see wins for live pay-TV (cable TV or MVPD+) in Q3 ’21. Households with live pay only, that is no streaming, are up to 10% in Q3 ’21 (compared with 9% in Q2 21), driven by cable TV. Similarly households with both live pay-TV and Streaming are up to 51% in Q3 ‘21, from 50% in Q2 ’21. Meanwhile streaming only (AVOD, SVOD or FAST) is down 2.2% points.

Looking forward, Kantar said that as the bulk of streaming penetration declines in Q3 21 came from “lighter” subscribers, Q4 2021 can expect to see fewer losses as the category is left with more engaged streamers. It suggested that in an already crowded market, pressure mounts as cable TV was winning among the pool of potential streaming subscribers and users.

The report concluded that the streaming landscape continues to be crowded and stacking continues to grow. Q3 2021 saw a loss of less engaged subscribers, primarily those with only one subscription in Q2 2021. As the bottom fell out, the category was left with more engaged subscribers, and as a result planned cancellation has dropped. Q4 2021 can expect to see more retention of subscribers, but more competition for screen time. Trending content will help determine who wins in Q4 2021.