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New research from Aluma Insights has analyzed what viewers rank as the most essential and non-essential SVOD services, with Netflix coming out on top as being “indispensable to meeting household video needs.”
Aluma surveyed nearly 2,000 U.S. household decision-makers for the report, and two-thirds (66 percent) of respondents cited Netflix as the streaming service they consider essential to meeting the needs of their household.
Hulu was cited by 53 percent and Disney+ by 52 percent.
Peacock (35 percent), Apple TV+ (28 percent) and MGM+ (previously EPIX NOW, 7 percent), were found to be least essential.
“This is one way of comparing a service’s utility with that of its competitors,” said Michael Greeson, veteran researcher and founder of Aluma Insights. “It says to some owners you’ve a bit more latitude when it comes to revenue optimization measures, such as cracking down on freeloading or increasing retail prices. It says to others there is great risk in significantly altering prices or service terms.”
Aluma Insights notes that Disney CEO Bob Iger recently said December’s 38 percent increase in ad-free Disney+ prices resulted in only minor subscriber losses, suggesting the service is not yet fully valued. Aluma analysts agree, and expect both Disney+ and Hulu stand-alone prices will increase by around 15 percent during 2023.
Netflix, Hulu and Disney+ topping the essentials list, and MGM+ finishing last, was unsurprising to Aluma analysts. Apple TV+ and Peacock being among the bottom three was, however, unexpected, according to the firm. Apple TV+ is recognized for high-quality original content that resonates well with its subscribers, but it has little depth in terms of third-party content and subscribers rank its value poorly relative to competitors. Peacock saw sizable growth in paid subscribers during 2022, of which two-thirds consider the service inessential, largely the result of library neglect. With Comcast eliminating the free Peacock tier, and phasing out complimentary service for Xfinity subscribers, prioritizing quality of content will be key to meeting the company’s conversion goals, Aluma Insights says.
The greater risk to less-essential services, according to the firm, is plateauing monthly SVOD spending. Aluma found that in 2022 SVOD households spent on average $43.25 per month on the services, up significantly from 2020 but relatively flat compared with 2021. However, between 2020 and 2022, the percentage of SVOD buyers open to spending more declined from 14 percent to 8 percent, while the percentage who planning to reduce these expenses increased from 17 percent to 25 percent.
