Winter is coming for streaming services

Slowing growth and higher prices threaten survival of streaming firms

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A leading analyst firm believes customer fatigue could kill off as many as half of the streaming services available today.

With streaming markets such as video-on-demand and music reaching saturation point, and customers growing increasingly tired of price hikes, the future of many streaming services is on the line, according to CCS Insight. What's more, piracy is rising as consumers rebel against subscription costs.

“In the media market, I think there is a recognition that all of these individual streaming services are not sustainable,” said Ben Wood, the company’s chief analyst. “We also believe that subscriptions more generally will come under pressure, because people will start to become more aware of the fact that they’ve slept-walked into having more subscriptions than they even realised, and they will get better at managing those subscriptions.”

Subscription saturation

Evidence that the streaming market is at saturation point isn’t in short supply. Ofcom’s Media Nations Report, published earlier this year, found that 68% of UK households have at least one streaming-video-on-demand (SVoD) subscription - the exact same level as it was in 2021.

While Ofcom found that revenue among the streaming providers is continuing to grow (up as much as 14% year on year), it’s at a much slower rate than previously, and that extra revenue isn’t coming from increased subscriber numbers. It’s coming from the introduction of ad-supported tiers, price increases and password-sharing clampdowns. In other words, the firms are putting the squeeze on the customers they already have.