As demand for subscription entertainment shows no sign of slowing, and content continues to fragment across new and existing services, audiences are fast approaching a tipping point, Deloitte Australia’s latest Media Consumer Survey reveals.
Deloitte’s tenth edition of the Media Consumer Survey drills down into Australian digital entertainment audience preferences. The survey focuses on five generations with a sample of more than 2,000 consumers in Australia. National media sector leader and partner Leora Nevezie said digital entertainment subscriptions are no longer a nice-to-have, they are almost a household utility now, with 80% of Media Consumer Survey
respondents paying for at least one digital entertainment subscription of one sort, and an average monthly household spend of $55.
Says Nevezie: “Younger generations lead the way – 95% of all Gen Z have at least one paid digital entertainment subscription service, closely followed by 93% of Millennials, and 60% of both Gen Z and Millennials having more subscriptions now than a year ago.
“We are well and truly in the age of the entertainment subscription – but how many can we have before both the experience and our budget break?”
The media and entertainment industry has seen huge digital acceleration in the past 18 months amongst rolling lockdowns and restrictions that had audiences reach for their remote controls, laptops, tablets and phones as a source of critical information and a welcome distraction. 42% have more subscription services than they did a year ago, and 70% have a paid TV/movies service in the household, up from 55% last year.
Adds Nevezie: “But managing and consuming multiple services is becoming complex and expensive. The race is on to lead the way on audience experience.”
The average household is spending 10% more on subscriptions than their target budget and 58% said they were concerned about the rising costs of multiple subscriptions.
There is a real desire to make things easier, with two thirds or should this be two out of three? respondents wanting to search and discover all content in one place, and more than half wanting to be able to subscribe to ‘bundles’ of services in the one place.
Nevezie said audience experience will be very much the next battleground, with aggregation and entertainment eco-systems taking centre stage and a shift from chasing new subscribers to instead focus on audience value management. Pay TV providers, telcos and the digital giants all have potential roles in aggregation solutions.
“Alongside this aggregation is a trend of consolidation – entertainment providers consolidating and converging their products and services to create entertainment ecosystems where audiences can move between content and services that are both free and paid, and with multiple revenue models.”
Says Will Castles, telco, media and entertainment sector leader, Deloitte Australia: “This tenth media and entertainment consumer survey focuses on audience behaviours, attitudes and trends and provides a valuable snapshot in this time of huge change which present great opportunities for service providers and media companies.”
The report also revealed the following insights:
There’s a subscription for that. And that. And that: While entertainment subscriptions have been household staples in the last 18 months, we may well see a decline in spending as lockdowns reduce and other entertainment options open again. The easy-come, easy-go nature of subscriptions makes churn a constant challenge with exclusive content hunting and hyper-aware users who understand their binge-worthy moment is just a subscription hop, skip and a jump away. Services will need to look beyond exclusive content, and demonstrate value to audiences through an entertainment ecosystem of multiples services and adjacent offerings.
– On average, respondents already feel they spend ~10% above their monthly subscription budget.
– 71% of respondents indicated they have cancelled a service previously.
– 27% of respondents cancelled an entertainment subscription before joining the same one again, and in younger generations this was almost half of all respondents
News: tapping into digital subscription natives: News content currently holds only a small piece of the subscription pie but there is significant potential for growth, particularly in the younger ‘digital subscription native’ audiences. Key to this will be striking the right balance of content behind and in front of paywalls, leveraging social media and focusing on quality and trusted content.
– 1 in 5 people said they would pay up to $10 a month for news
– Keeping up to date with news is a primary reason Millennials and Gen Z use social media
– 64% are concerned about fake news in their social media feed
Sport: shifting the goal posts: Engagement with sport leagues, teams, and events extends far beyond video streaming and digital content, but it appears that Australia is on the cusp of a digital sporting content revolution. The increased distribution of sporting rights and open embrace of feature rich platforms by both providers and consumers over the past year has set the scene for accelerated innovation and audience experience.
– 18% of respondents have a paid sports subscription service
– Younger generations are more willing to sacrifice screen size for the flexibility of personal devices.
Free to Air TV – A loungeroom staple: The separation of ‘free’ broadcast viewing from paid viewing is becoming smaller as broadcasters and entertainment services look to move audiences more seamlessly between free and paid content. With FTA TV maintaining its dominance in people’s lives and with its expansion into BVOD, there are plenty of opportunities use this as a driver towards subscription and pay-per-view content to maximise value from audiences.
– FTA TV remains the overall top home entertainment activity (63% of respondents ranking it in their most frequent home entertainment activities)
– The way we watch FTA TV is changing – Matures and Boomers almost exclusively watch on a television, at 100% and 95% of respondents respectively. However, Millennials and Gen Z lead the way on laptop and mobile viewing: Millennials at 20% and 16% respectively