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Attention recession impacts on D2C growth

Report by Richard Broadhurst
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20,000 foot view:  Weekly active user (WAU) penetration for the top streaming services is now slowing with quarter-on-quarter growth effectively flat for the leading subscription video on demand (SVOD) services. Peak attention is now clearly here for video. The looming attention recession, which is already impacting the wider digital entertainment landscape, will exacerbate the greater underlying disengagement trends such as cancelling subscriptions that are starting to impact on video. Average weekly hours for SVOD are marginally down from            hours in            2021 to            hours in            2022. Nonetheless, the increasing moves to add an entry-level ad tier to SVOD services are likely to also increase cancellations from the            of consumers who skip ads. WAUs can thus be expected to decline in            2022 as subscribers disengage with both their attention and their wallets.

Key insights 

  • As the            recession plays out, multiple video            continue to climb.            of consumers            have one or more SVOD            compared to            as of            2021
  • Consumers are            approaching saturation with WAU penetration            the leading SVOD services slowing
  • Netflix            Amazon            Video            and Disney+            are all            marginally between            2021 and            2022            Apple TV+ remains flat at            penetration
  •            strategy is evolving to offset cost-of-living impacts with Disney announcing in            2022 that they will be introducing an ad-supported tier to Disney+, and Netflix is rumoured to be considering doing the same
  • Ad-supported tiers            face significant resistance as            of            usually skip video ads online                       2022, up by            from            2021
  • YouTube remains            most used video platform by            subscribers – of those who            more than one video subscription,            use YouTube on a weekly           
  • Netflix is            the most popular SVOD service            SVOD WAUs, with            of all            subscribers being a Netflix WAU,            experiencing two consecutive quarters of            decline in            2022

Companies and brands mentioned in this report: Amazon Prime Video, Apple TV+, Disney+, ESPN+, Facebook Video, Formula            HBO Max, Hulu, Meta, Netflix, Paramount+, Spotify, Snap, Pluto Tv, Tubi, and YouTube