The latest data show that SVOD growth has stalled and that winning a new subscriber is harder than ever. Competitor bundles and telcos can help keep a service growing.
SVOD growth has stalled
The latest research from Leichtman Research Group (LRG) shows that the days of robust SVOD growth are behind us. Penetration of US homes with one of the top three services – Netflix, Hulu, and Amazon Prime Video – remains at 83% in 2023, 
the same as last year. If we expand our view to the top 15 services, penetration grows by another 5% to 88%. However, such deep penetration makes it inevitable that growth will slow.
Even the amount we watch the most popular services seems to have plateaued. LRG says 2 in 5 homes stream from one or more of the top three services, which has remained the same for the last three years.
People are still adding services to the SVOD portfolio. Review.org found that 39% had canceled a streaming subscription in the last six months, and 55% had added one. But many people have reached their limit on the number of services they will pay for. In other words, a service provider must convince a prospective subscriber that their service is better than one they currently use.
To keep growing, service providers must get more creative in their approach to the market. Service bundles and partnering with telcos are two areas that seem to be working.
Think outside the affinity box with bundles
Bundling services together at a discount is a very effective strategy for providers. For example, Disney launched its discounted bundle of Disney+, Hulu, and ESPN+ in November 2019. Two years later, 40% of US Disney+ subscribers got the service as part of the bundle.
Sometimes, a competitor bundle could be a win-win for both services. For example, Verizon offers a bundle of Netflix Premium and Paramount+ Premium with Showtime for $25.99 monthly. Subscribing to the services separately costs $5.99 a month more, so the bundle saves $71.88 a year.
Jeff Shultz, Paramount, Colin Dixon, nScreenMedia at StreamTV Show 2023
Jeff Shultz, Chief Strategy Officer and Chief Business Development Officer at Paramount Streaming, says the deal helps both Paramount+ and Netflix:
“A bundle subscriber is a superior subscriber. We are going to see something different in terms of engagement or in terms of lower churn, better retention.”
Mr. Shultz has a point. A bundle is much more difficult for another service to dislodge from a viewer’s streaming TV portfolio than a single service.
Non-media distribution partnerships work
Viewers are struggling to manage all the TV subscription services they have. And subscription services often make it so difficult to cancel that the FTC is preparing a new “click-to-cancel” rule to protect consumers.
Telcos around the world are stepping up to help with the burden. They allow customers to subscribe to, cancel, or pause a partner SVOD services through a portal they provide and pay via their regular billing method. For example, Verizon has launched +play in the US for its mobile customers. They can subscribe to various SVOD services, including Max, YouTube TV, 
Paramount+, and Netflix. Verizon also offers discounts on some services and bundles, as it does with the Paramount+/Netflix bundle discussed above.
The approach is resonating with subscribers. According to Omdia, 20% of SVOD subscriptions globally – and 18% in the US – are purchased via indirect wholesale relationships like Verizon’s +play. The company expects telco’s share to increase to 25% by 2028.
The data suggests that a telco’s ability to simplify billing and subscription management removes an important barrier preventing viewers from signing up for a new SVOD.
It’s not just one thing!
Competitor bundles and telco partnerships are important tools for SVOD services to consider when trying to boost subscriber growth. However, there are many others. For example, Paramount+ recently announced distribution partnerships with Delta Airlines and Walmart. In other words, it is not just one thing that service providers should be doing to boost growth. They need to think outside the box to spot new opportunities and act fast to act on them.
