Why this matters
Deloitte conducted a pre-COVID-19 survey December 2019 - January 2020 and a second survey in May following the onset of the pandemic. Together, the surveys provide insight into how media consumption has changed. Deloitte found trends that were present pre-COVID-19 have accelerated, sometimes dramatically, in a short time.  

Consumers have more time on their hands to watch, listen and play games. At the same time, it's harder to keep customers as they can easily sample services via subsidized trial offers with no fear of penalties for cancelling. The pressures are likely to mount as consumers have less money to spend, with 39% of consumers reporting a decrease in their household income since the pandemic began. Media and entertainment companies can take this unprecedented moment to ask insightful questions and reevaluate their business in order to take advantage of windfalls, recover from setbacks, and thrive in the decade to come.

Subscriptions continue to swell, in spite of fatigue
Pre-pandemic, the survey found consumers were still enjoying digital entertainment more than ever and were willing to pay for multiple subscriptions. This trend has continued during the pandemic. However, there is growing frustration in trying to navigate the flood of streaming options, all while trying to manage costs. This fatigue may lead to increased cancellations. The May survey found that some consumers sign up for free trials, cancel when the trial ends or a favorite show or series is completed, and switch services in search of fresh content.

• Pre-COVID-19, the average U.S. consumer had 12 paid entertainment subscriptions. Millennials averaged 17 subscriptions, Gen Z had 14, while Gen X had 13. Twenty-seven percent of consumers, including 42% of Millennials, said they planned to subscribe to more services in the coming year.

• Pre-COVID-19, 40% of millennials were "overwhelmed" by the number of subscription services they manage, and 43% intended to reduce them.

• Since the pandemic began, consumers have added and cancelled subscriptions of all kinds. For example, 20% of U.S. consumers made changes to their streaming music subscriptions: 12% added at least one music service, 5% cancelled at least one, and 3% added some and cancelled others.

Key quote
"Many media and entertainment companies have seen subscribers and users grow, both before and since COVID-19 began. The streaming wars were already in full force, with consumers having lots of options. But with less money to spend, the competition for consumer attention and retention has never been fiercer. Media companies that deliver the best value for money, provide exclusive content, and have strong libraries that continue to engage subscribers can lead for the next decade."

—Kevin Westcott, vice chairman, Deloitte LLP,
and U.S. telecom, media and entertainment leader

Streaming video trending upward; will it sustain?
Not only do more consumers have streaming video services, the average streamer pays for more services than ever. However, as more media providers join the fray, competition is growing and putting pressure on content and pricing. Additionally, when COVID-19 restrictions are lifted, consumers may reduce their subscriptions as they turn their time and attention to other activities.

• Eighty percent of U.S. consumers say their households now subscribe to at least one paid streaming video service, up from 73% in the pre-COVID-19 survey.

• Subscribers now have an average of four paid streaming video subscriptions, up from three in the pre-COVID-19 survey.

• Pre-pandemic, 27% of U.S. consumers said they plan to add a new streaming video service in the coming year; since COVID-19, 32% have added at least one new paid streaming video service.

• Nearly 70% of Boomers now have a paid streaming video subscription.

• For nearly a quarter of subscribers, a free or discounted rate was a big factor in choosing a paid streaming video service.

• Subscribers are drawn to streaming video services with a broad range of shows and movies (51%) and content they can't get anywhere else (45%) — both originals and old favorites.

• In the earlier survey, 20% of streaming video subscribers cancelled at least one service in the past year. Since the pandemic began, 17% of subscribers have already cancelled a service.

• High costs (36%) and expiring discounts or free trials (35%) were cited as the top reasons for cancellation.

Key quote
"To win subscribers rapidly, many streaming video services are offering low introductory rates and free trials. But with cheap trials and easy cancellations, consumers can binge watch their favorite shows, drop the subscription, and then return when the next season launches. Since the COVID-19 pandemic began, streaming services have attracted more subscribers than ever. The biggest challenge for providers will likely be to retain customers once their series is over and the full price kicks in. Free ad-supported streaming could gain market share from paid services as budgets tighten."

—Dr. Jeff Loucks, executive director, Deloitte Center for
Technology, Media and Telecommunications, Deloitte LLP

Ad-supported video streaming: battle of the business models
Ad-supported video streaming services may be gaining traction as some consumers would rather watch a certain level of advertising to reduce the cost of a subscription, or watch for free. Providers should consider which business model will resonate best with different consumers as they fight for viewers.

• During the pandemic, nearly half (47%) of consumers cited using at least one free ad-supported streaming video service.

• More U.S. consumers want access to cheaper, ad-supported streaming video options, both before (62%) and since the COVID-19 pandemic (65%), while 35% of consumers don't want ads and will pay to avoid them.

• Gen Z and millennials are more likely than older generations to prefer the subscription-only model they grew up with; Boomers and Matures like the ad-only option that closely resembles TV.

Binge gaming booms during the crisis
Consumers have been spending more time playing video games, especially during the pandemic. Video gaming has become a social experience, but also a family experience as more kids and teenagers embrace it and draw in their parents as well. In fact, a third of U.S. consumers and nearly half of Gen Z and Millennials say that video games helped them get through a difficult time.  

• Earlier this year, 24% of consumers surveyed listed playing video games among their top three favorite entertainment activities. For Gen Z and Millennials, it was 44% and 37% respectively.

• In that same survey, 29% of consumers noted they were binge gaming weekly, for an average of 3.3 hours per session.

• Since the crisis began, nearly half (48%) of U.S. consumers have participated in some form of video gaming activity. For Millennials, it is 69%, and for Gen Z, it is 75%.

• In fact, 29% of U.S. consumers said they are likely to use their free time to play a video game than watch a video.

• Seven percent (7%) subscribed to a video gaming service for the first time during the pandemic.

• Among those participating in video gaming activities during the pandemic, 34% are playing video games at home with their families much more, and 27% are playing to socially connect with others.

• Prior to COVID-19, 25% of consumers watched live-streamed and recorded video of others playing games. For Millennials and Gen Z, it was around 50%. These numbers continue to hold strong during the pandemic.

What does the future hold?
The pandemic has created conditions and opportunities for people to try new things as they search for ways to stay entertained during a challenging time. The question for service providers is will these new interests remain as consumers get back to normal, continue to grapple with economic hardship and become increasingly selective about the content they choose.

• During the pandemic, 38% of consumers have tried a new digital activity or subscription for the first time.

• The most popular activities are viewing livestreamed events and watching video with others through a social platform, web application, or videoconference.

• More than two-thirds of consumers said they are likely to continue their new activity or subscription.

• Twenty-two percent of consumers — 30% of Gen Z and 36% of Millennials — paid to watch a first-run movie on a streaming video service during the pandemic. Of those that did, 90% said they would likely do so again. Of those who did not, 42% of consumers said it was too expensive.

• One-third of consumers noted they will not be comfortable attending live events for the next six months. Notably, 50% of Millennials and 47% of Gen Z would be willing to attend a sporting event in the next six months, compared with just 28% of Boomers.

For additional details on the findings, visit here. Connect with us on Twitter: @DeloitteTMT, @kwestcott911, @Jeff_Loucks, #digitalmedia and #tmttrends.