Netflix viewed as essential by subscribers as some rivals struggle

Netflix, Hulu, and Disney+ are considered “essential” streaming services by most of their viewers, according to research. However, AppleTV+ and Peacock should worry, as their subscribers would probably cancel memberships first thing if they had to.

Aluma Insights, a research firm, found that two-thirds of Netflix buyers viewed the service as indispensable to meeting household video needs. Hulu and Disney+ were the only other services to reach a 50% mark in this area.

In essence, this means that subscribers find certain platforms essential and probably watch content regularly rather than sporadically. That’s why the study is definitely not good news for Epix Now, AppleTV+, and Peacock – these platforms were found to be the least essential.

Aluma analysts aren’t surprised. Netflix is the most popular streaming platform worldwide, with the most content available to viewers – yes, it has been cracking down on password sharing, but the company also recently cut prices in many countries.

Disney+ is also confidently moving forward with new investments and programming. Disney’s chief executive Bob Iger recently said December’s 38% increase in ad-free Disney+ prices resulted in only minor subscriber losses. This suggests the service is not yet fully valued – more customers would likely have quit if the business were servicing its potential client base at full capacity.

According to Aluma analysts, both Disney+ and Hulu standalone prices will increase by around 15% during 2023. Back in December 2022, Disney+ raised the monthly price from $7.99 to $10.99.

“This is a one way of comparing a service’s utility with that of its competitors,” noted Michael Greeson, veteran researcher and founder of Aluma Insights.

“It says to some owners you’ve a bit more latitude when it comes to revenue optimization measures, such as cracking down on freeloading or increasing retail prices. It says to others there is great risk in significantly altering prices or service terms.”

Among platforms that viewers find non-essential and would stop watching if needed, AppleTV+ certainly stands out. Again, this is not a shock – even though the service is recognized for high-quality shows like Severance or The Morning Show, it’s slow to churn out new seasons of its most celebrated series.

Besides, Aluma says, AppleTV+ “has little depth in terms of third-party content and subscribers rank its value poorly relative to competitors.”

Peacock’s subscriber base grew during 2022, but two-thirds of its members consider the service inessential. Once again suggesting lack of a rich catalog of shows might be to blame, Aluma calls it “the result of library neglect.” Besides, TV provider Comcast has eliminated the free ad-based Peacock tier.

Probably the greatest risk to less-essential services, forced to operate in a tremendously crowded market, is plateauing monthly spending on streaming. Inflationary pressures are still high, so Americans are choosing to spend the same amount of money – or less – on fewer platforms, which are getting pricier.

“In 2022, SVOD (subscription video-on-demand) households spent on average $43.25 per month on the services, up significantly from 2020 but mostly stable compared with 2021. However, between 2020 and 2022, the percentage of SVOD buyers open to spending more declined from 14% to 8%, while the percentage planning to reduce these expenses increased from 17% to 25%,” Aluma said.