Big SVODs have seen growth slow dramatically in the last year or so. They are looking for new bundles with competitors, FASTs, and TV OS partners to keep growing.
SVOD’s growth is slowing
According to Kantar Media, SVOD’s penetration of US households has reached 89%, up from 82% in 2021. While this certainly represents good growth for the industry, it looks like it is the smaller SVOD services that are reaping the benefits. Growth among the biggest SVODs has slowed to a crawl. Consider that:
- Netflix lost just under a million subscribers in the US and Canada in 2022,
- Disney+ lost subscribers for the first time in the US in the first quarter of 2023, and
- Hulu added 200,000 subscribers in Q1 2023 compared to a 1.3 million gain in the same quarter of 2022.
According to Leichtman Research, the number of people with at least 1 of the top 3 SVODs increased by 5% between 2020 and 2022. However, the average number of paid services per person increased by 17% in 2022 alone.
For the big SVOD services, recruiting new subscribers in the US is getting harder. One thing they are trying is cheaper ad-supported tiers of service. But another approach is getting creative with bundles and partners. Here are three examples from the news this week.
Verizon bundles competitor SVODs for its wireless customers
Verizon launched an SVOD aggregation service called +play for its myPlan wireless customers last year. The plan allows customers to manage subscriptions to various subscription services and pay for them through their wireless plan. There are 25 SVOD services available, including Netflix Premium, YouTube TV, and Paramount+ Basic. The services are priced at their standard standalone rate, so the primary advantage of +play is the convenience of a single bill.
In an unusual move, Verizon is offering a bundle of Netflix Premium and Paramount+ Premium with Showtime for $25.99 a month. Subscribing to the services separately costs $5.99 a month ($71.88 a year) more. Jeff Shultz, Chief Strategy Officer, and Chief Business Development Officer at Paramount Streaming, said of the offering:
“This new and distinctive streaming bundle on Verizon’s +play is yet another example of our commitment to offering consumers universal distribution and industry-leading deals.”
I’ll be talking with Mr. Shultz at the StreamTV Show in Denver next week, Wednesday, June 14th, at 9:30 MDT. You can sign up for the conference here.
Sling TV shares SVOD deals with Freestream users
Sling TV has been aggregating SVOD services for its subscribers for some time. Customers can sign up for Showtime, Paramount+, Starz, MGM+, and Discovery+ for just $5 each for the first month. Once subscribed, the content is integrated into the Sling TV experience, making it easy to search, discover, and watch the content.
Now users of Sling TVs Freestream FAST service can also get in on the $5 deal without a subscription to Sling TV. Freestream offers 400 channels and 41,000 on-demand titles, all available for free with ads.
Improving reach with more TVOS providers
Smart TVs are becoming the default connected TV streaming device in many markets. For example, 74% of TV homes in the US now have a connected smart TV, versus 62% with a streaming stick or box. It is becoming increasingly important for SVOD services to expand their availability beyond just the most popular TV OSs.
Vidaa is a TV OS that manufacturers like Hisense and Toshiba use to power some smart TV models. Paramount Global already makes Paramount+ available on US TVs using Vidaa. It is also partnering with Vidaa to put a Pluto TV button on remotes in several European countries and Canada. The company is expanding its relationship with Vidaa to Canada and Latin America. Vidaa users in Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, Venezuela, and Canada can now access Paramount+ on their TVs.
The relationship is particularly important in Latin America, where the smart TV is much preferred over CTV devices for streaming on TV. Paramount has the rights to popular soccer leagues there, including the English Premier League in Mexico and Central America, the CONMEBOL Libertadores Cup across Latin America, and the CONMEBOL Sudamericana in Brazil. Sports rights are a big investment, and ensuring everyone can watch on their device of choice is critical in maximizing ROI.
