It is truly a great time to be a television/movie enthusiast. With a large number of OTT platforms providing all sorts of content at the click of a button, we can watch everything we want to our heart’s content. And the situation is absolutely bright. However, a recent survey conducted for The Trade Desk points to an escalating trend of “Subscription Fatigue” among customers of the OTT space. For an industry that has experienced an unending wave of growth over the past few years, could this be just a minor blip or a legitimate cause for concern?
Before we touch upon what this phenomenon is, we need to understand the existence of the “Subscription Economy.” If we look around us, a majority of the products and services we consume on a daily basis are purchased in the form of a subscription – i.e., we make regular upfront payments for a variety of commodities. These can range from essential subscriptions (such as groceries and rent) to unnecessary but preferred subscriptions (such as a Netflix account).
The concept of subscription fatigue is something we are beginning to see among non-essential subscriptions – with an overwhelming number of competing services on offer to us, a feeling of “too much” may be beginning to creep in amongst consumers. The Trade Desk’s survey reflects this observation, with almost 60% of 2,600 respondents stating that they spend too much on multiple OTT subscriptions, and more than two-thirds stating that high subscription prices are a source of frustration.
Subscription fatigue can be described as the potential tiring of customers with every additional paid subscription offering – this is reminiscent of the current-day OTT space. In India alone, we have almost 40 different OTT platforms, 26 of which possess at least 10,000 customers. In order to satisfy a variety of interests, the average consumer is required to subscribe to a minimum of 2-3 platforms. Clearly, there is too much to choose from, and in many cases, one is forced to choose multiple options to obtain their favoured content. Couple this with the information regarding price responsiveness of OTT customers, and we begin to see the seeds of SVoD fatigue being sown.
Over half of the respondents in Deloitte’s Digital Media Survey (2021) stated that they were re-evaluating the presence of multiple OTT subscriptions and about 40% stated that they wished to terminate one or more subscription(s) in the near future. The 2021 survey also showed a larger number of respondents ranking gaming and music streaming as greater interests than OTT viewing, as compared to the 2019 survey. In fact, this escalating trend of SVoD fatigue has coincided with a worldwide slowdown in OTT growth (Netflix achieved only 66% of its growth target in its recent quarterly report).
Not a sign of worry
However, this is also not necessarily a sign for worry; as platforms have already taken steps to curb this trend. For example, Hulu and HBO seek to avoid losing customers to this trend by carving out a niche in the various entertainment genres and compensating by relatively lower prices. Disney+ has already dug into niche genres of family entertainment, sci-fi and comic-book adaptations, with its primary IPs (Nat Geo, Disney, Marvel and Lucasfilm). Amazon, on the other hand, has taken an entirely different direction by clubbing Prime Video with a larger subscription package (i.e., Amazon Prime itself), thereby making Prime Video a part of a “utility” rather than a non-essential subscription. Netflix too plans to diversify, with recent reports indicating the company’s interest in entering the world of gaming.
In a nutshell, SVoD fatigue can be seen as a boon as well as a bane. While companies could potentially lose out of subscribers, this trend also tells us about the massive variety available to us as consumers. After all, like we said, it is truly a great time to be a television/movie enthusiast.
(Photo for representation purpose only)