Cord-Cutters Willing To Pay More For Streaming Services

As legacy media companies like Comcast enter the video streaming wars, a new survey suggests that price-sensitive consumers are still willing to spend much more to watch movies and shows online, reports The Philadelphia Inquirer.

A KPMG survey of more than 2,000 consumers found that consumers pay $22 per month on average for video streaming subscriptions and are willing to pay $11, or 50% more, for additional services. At the same time, the survey suggests that consumers care more about a streaming platform’s price than its content library.

The study comes as Apple, AT&T, Walt Disney Co., and others enter a highly competitive streaming business that’s been dominated by Netflix and Amazon and fueled by consumers ditching costly cable plans. The findings could be interesting for Philadelphia-based Comcast, which plans to launch a free, ad-supported version of its forthcoming streaming service.

Price was the most important feature consumers consider when choosing a streaming service, beating out content, advertisements, and ease of use, the survey found. A little more than half (52%) of 18- to 24-year-olds and 67% of people ages 25 to 60 ranked price above all other features. By comparison, 36% of younger consumers and 48% of older customers said content is most important.

“What was clear is that there is this high degree of price sensitivity on what they’re willing to pay,” said Michelle Wroan, who leads KPMG’s national media sector.

The new entrants into the streaming business are charging anywhere from $4.99 per month (Apple TV+) to $14.99 (HBO Max) for their libraries of on-demand movies and shows. Netflix and Amazon Prime Video each cost $8.99 per month, while Hulu charges $5.99 for its basic plan, which includes ads.

While most consumers prioritized price, the KPMG survey found that being ad-free was the second most important feature for younger consumers. Few consumers cared about reducing fees by inserting ads, with just 11% of younger consumers and 9% of older ones saying that was most important.

Assuming the price is right, “content is still king,” Wroan said, which is why media companies have spent heavily on acquiring rights to popular shows and lining up high-profile production teams.