Australia’s demand for entertainment seems to be defying current economic challenges but consumers are starting to worry about how much they are spending on streaming media subscriptions, according to analysis by Deloitte.
The average household now has 3.1 digital media subscriptions, up from 2.3 last year.
They are spending up to $62 per month, about $7 more than in 2021.
But high churn rates show there’s a battle for audience retentionwith nearly a third of users cancelling at least one subscription in the last six months.
Cost is the main reason given for cancelling or switching subscription services.
The eleventh edition of Deloitte’s annual Media Consumer Survey, based on self-reported data gathered from more than 2,000 consumers, drills down into how Australians consume media and entertainment, particularly through digital channels.
It shows the industry is entering new territory after the pandemic-fuelled growth of 2021, with the battle for consumer engagement and attention now white hot.
"This year's survey provides generation specific snapshots of audience behaviour during a period in which changing market dynamics are emerging in a post-pandemic setting," says Deloitte national consulting leader for the Tech, Media & Telco Industry Group Peter Corbett.
“For example, consumers are taking new measures to manage their digital media spend given pressure on household budgets with 64% of respondents concerned about having multiple subscriptions and many overspending target monthly budgets, particularly Gen Z.
“User generated content (UGC) is having a golden moment with 39% of respondents creating and sharing content and 64% saying they spend more time watching UGC than planned."
Deloitte Media and Entertainment strategist and report author Jeremy Smith: "Australians are continuing to stack up digital entertainment subscriptions even when budgets get tight with people prepared to give up eating out, alcohol and tobacco before they would give up their subscriptions.
“The upcoming launch of new advertising tiers in what have been traditionally ‘ad free’ subscription video on demand services is likely to change the landscape again. However, what’s clear is that a good portion (58%) of respondents will pay to keep their SVOD ad-free.
“As we look ahead, the next horizon is the age of the metaverse and associated technologies, such as blockchain, NFTs and Web 3.0 which may reshape the ways audiences and media organisations interact. But it’s still early days with only 26% of respondents reporting that they’ve engaged with the metaverse in some way.
“We are seeing a change in engagement in sport content. 26% of older generations watch 6 plus hours of sport a week compared to 13% acorss younger generations and women’s sport is in demand with 37% of respondents saying they would watch more women’s sport if advertised more broadly.”
Media specialist and Deloitte Digital Consulting partner Leora Nevezie, said: “Digital entertainment subscriptions are everywhere, and used by most Australian households. Users want the experience but not the cost as managing and consuming multiple services becomes more complex and more expensive.
“In this environment, audience experience will be very much the next battleground, with aggregation and entertainment ecosystems taking centre stage and a shift from chasing new subscribers to instead focusing on audience value management. Pay TV providers, telcos and the digital giants all have an opportunity to provide solutions where audiences can move between content and services that are both free and paid, and with multiple revenue models.
“While this paints a positive growth story for media providers, it does come with a catch. Subscribing to more services inevitably reduces the amount of time consumers spend on each service, which has a detrimental effect on relationship strength and customer satisfaction, presenting a challenge for companies to retain contended audiences.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.