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Thora Buckner
As major platforms like Netflix and Disney+ roll out cheaper subscription tiers and crack down on password sharing, a new NPR/Ipsos poll reveals that consumers are focused on three important criteria when they make decisions about TV streaming services: cost, content and ease of use.
"Cost is key...frankly, I think this speaks to the greater economic uncertainty felt by Americans right now," said Mallory Newall, vice president of public affairs at Ipsos, which conducted the poll.
"At the same time, these users are signaling there's such a thing as too much choice....The most attractive thing a streaming provider can do right now is be price-sensitive while also continuing to offer great content. And it's a bonus if they make it easy for their users to navigate their library or to bundle with other platforms."
Netflix will roll out a cheaper subscription tier on Nov. 1 that places ads inside its shows, followed by a similar option at Disney+ on Dec. 8. Poll results show these initiatives may be popular with consumers; 70% of respondents say having the ability to choose whether or not to have ads is an important factor in choosing a streamer.
But people were more evenly divided on the question of whether they would actually purchase such a subscription, with 51% of users still willing to pay a little more for an advertiser-free experience. (47% say they would pay less and watch ads.)
Poll participant Tim Nguyen, 24, an accountant for the government who lives in Philadelphia, says he likes the option of accessing a streaming service with ads, even if he probably wouldn't do so for his favorite streaming services.
Netflix has estimated that 100 million households are using its service by sharing passwords with someone else who actually pays for the subscription. The company told investors it will roll out a plan early next year allowing customers to pay a small fee to share accounts with people outside their households.
But the NPR/Ipsos poll found 50% of users say charging more to share accounts would be an important factor in their decision to drop a streaming service (only 15% of respondents were more concerned about a crackdown on password sharing than rising costs, where 83% expressed concerns).
Seventy percent of streaming service users polled by NPR/Ipsos say they pay for all the services they subscribe to; those numbers are not far off from the results of a spring survey by Leichtman Research Group which said that one-third of Netflix subscribers share passwords. Only 3% of streaming subscribers in the NPR/Ipsos poll say they pay for no services and watch all their streaming TV by sharing passwords; 19% say they pay for most services but borrow passwords to watch some platforms.
That's what survey participant Mia Brunkhorst does. The 28-year-old, who works as an instructional designer at Arizona State University in Tempe, pays for three streaming services and accesses a few others via the passwords of close relatives. But she's not worried about extra charges for sharing passwords.
"I feel like even if they added an additional fee, that fee would be cheaper than paying for another Netflix subscription," Brunkhorst said, adding that she believes more people share account information than they admitted to pollsters. "I totally don't believe only 19% of people share passwords."
About 48% of users did not add or drop a streaming service from their array of subscriptions in the past year; 31% added or dropped a service once in the past 12 months. And as sensitive as they are to concerns about price, if their most-used streaming service increased its subscription fees by $5 monthly, 58% would continue their subscription (that percentage drops to 33% if the price goes up $10 per month).
Respondents subscribed to an average 3.55 streaming services per month, costing $42.38 monthly. Compare that to a median cost of $79 monthly for cable TV service, according to a March survey published on the website cableTV.com, which averaged the prices of 52 different plans.
Just 19% of all Americans say they access TV through broadcasts received through an antenna. By contrast, 71% of Americans use streaming services, compared to 48% who use cable/satellite/fiber optic systems.
Newall says these numbers indicate subscribers generally like what they're seeing on streaming services. "A majority feel...they're seeing people like [themselves] reflected, they like the content, they like what streaming platforms have to offer," she said. "They just want to make sure that it's still easy to find the content they're interested in and that they don't have to look across platforms or pay an arm and a leg to do so."
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Overall, Netflix added 3.62 million streaming subscribers worldwide in the third quarter, above its forecast for 3.55 million. The company reported 69.17 million streaming subscriptions for the three-month quarter that ended Sept. 30.
Hastings said he still expects Netflix will add 5 million to 6 million new U.S. subscribers annually for the next several years despite rising competition. Netflix anticipates it will add an additional 1.65 million U.S. subscribers in the current quarter, 13% fewer than the same time last year.
This year HBO launched its stand-alone streaming service, called HBO Now, at $14.99 a month. Showtime followed soon after with its own service priced at $10.99 a month. Hulu recently announced a limited-ad tier for $11.99 to make it more desirable to commercial-adverse viewers.
But to keep and attract viewers, Netflix is finding it has to keep its supply of content flowing. The company said it would spend about
$5 billion in programming costs over the next year to fund original content and also license the rights for TV shows and films.
Netflix has also shown a growing focus on acquiring exclusive rights to TV and movies. For instance, Netflix decided to not renew a deal with pay TV channel Epix because it was not exclusive. Epix, which already had a deal in place with Amazon, signed a nonexclusive deal with Hulu instead.
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