Kantar’s latest Entertainment on Demand (EoD) data and analysis on the global video streaming market reveals VoD household penetration increased across all markets covered in Q4’23 compared to the previous quarter, with on average a 1.8% point increase. However, planned cancellations in Q4’23 vs Q3’23 also increased – across all major SVoD providers.
As the competition intensifies, Kantar’s data shows that despite AppleTV+ being the clear winner in the share of new subscribers in Q4’23, Netflix continues to grow its subscriber base in nearly all markets.
AppleTV+ success in the last quarter of 2023, is a combination of a winning strategy of free trials powered by the success of British shows Slow Horses & Ted Lasso to attract new viewers.
Key takeaways from Kantar's Entertainment on Demand (EoD) study, from October to December 2023, include:
- Netflix’s ad tier continues to perform, 48% of new Netflix subscribers opted for the ad-tier in Q4’23
- Apple TV+ were the fastest growing SVoD service with a multi-market presence in terms of % subscriber growth thanks to free trials, and hit shows
- After a lull in Q3, Prime Video took the #1 spot for share of new paid VoD subscriptions in Q4’23, bolstered by a successful holiday season for the wider Amazon Prime service
- In Q4, Netflix launched the final season of The Crown, becoming again the most popular title, followed by Yellowstone and Virgin River
- Planned cancellations are on the rise, with all major SVoD providers noting a higher planned cancellation rate in Q4’23, than in Q3’23
- It was a successful quarter for pure sports streamers, notably ESPN+ in the US and DAZN in Europe, noting strong subscriber growth. For more information on sport: Game Changer: The evolution of live sports streaming
Netflix profitable for a reason
Netflix continues to adapt, evolve, and set the pace for the VoD industry. Despite mixed reviews from critics, the final season of The Crown strengthened Netflix’s performance in Q4’23. Netflix noted subscriber growth in all markets tracked by Kantar EoD, aside from Great Britain, where they were marginally down quarter on quarter.
Netflix kicked off 2024 with two key announcements - the removal of their cheapest ad-free plan and the strategic venture into live sport streaming. However, as emphasized by Ted Sarandos during Netflix’s fourth quarter earnings, the focus remains on the entertainment aspect of sport. This builds on the growing variety of sporting docu-series released throughout 2023, such as Drive to Survive, Break Point, Full Swing, and the Six Nations. In addition, WWE also presents a unique opportunity for Netflix to tap into a dedicated, niche audience. Currently, 50% of all sports fans subscribe to Netflix, leaving ample opportunity for Netflix to broaden its sporting ‘entertainment’ portfolio.
With retention rates strong and stable, alongside securing their highest subscriber advocacy for the whole of 2023 in Q4, with a net promoter score (NPS) at +40, Netflix is showing no signs of slowing down.
AppleTV+ momentum is growing
AppleTV+ emerged as a standout performer in Q4’23, rounding off a successful second half of 2023. It was the fastest-growing SVoD service in terms of percentage of subscriber base growth in Q4’23.
Interestingly, AppleTV+ performed particularly strongly in GB, taking #1 spot for new paid subscription share, and were in the top five across share of new SVoD subscribers in all other markets, with Germany being the only exception. This shows that content remains king, with hit shows Slow Horses, and Ted Lasso driving significant new sign-ups. In addition to attractive content, free trials remain fundamental to Apple TV+’s growth, with 36% of all new sign-ups citing this as a driving factor. Moreover, 23% of current subscribers now rank AppleTV+ as their primary SVoD service, a substantial increase from 20% in Q3'23. This trend is particularly evident in the US, GB, and Spain, underscoring Apple TV+’s increasing presence in the VoD landscape.
Despite this, persistently high churn rates will present challenges for Apple TV+ throughout 2024, with 13% of current subscribers already planning to cancel in the next quarter. Only 6.7 out of 10 new subscribers envision a long-term commitment to the service, with current subscriber sentiment leaning towards short-term consumption. Furthermore, Apple TV+ excels in subscriber perception towards content quality, only rivalled by Netflix in subscriber satisfaction. However, there are two key areas where they fall behind competitors: content variation and perceived value for money. To sustain its growth, Apple TV+ must focus on expanding its content library and enriching the user experience.
FAST continues to rise
As VoD services aim for profitability, they are diversifying like broadcast giants did with ad-supported Pay TV. Yet, amidst major streamers' shifting to AVoD, Free Ad-Supported Streaming (FAST) is gaining traction and risks being overlooked by leading SVoD services. FAST is present in over 1 in 3 households, predominately led by services like Samsung TV Plus, Pluto TV, and Freevee. This surge impacts key retention metrics for SVoD services, disrupting traditional models and reshaping consumer behavior in the digital streaming landscape. Furthermore, FAST competes directly with SVoD for viewership, influencing usage and screen time. As FAST services invest more in content, expect this growth to continue in 2024.
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*Unless stated otherwise, all data refers to the US, Australia, GB, Germany, Spain, and France.