Due to the rapidly changing environment, people are paying much more attention to expenditures on broadband and streaming services. The latest Deloitte Consumer Signals report suggests that the available choices confuse people, so the economic burden remains a key influencer.
Based on another online survey of 20,000 households across seven mature markets, EY’s Decoding the Digital Home 2024 reveals that customers are now more discerning than ever.
The cost-of-living crisis is still relevant, so let’s explore why so many people are looking for cheaper broadband or media providers, although they know that cheap prices may mean getting a worse service.
Price Sensitivity Dominates Consumer Choices
The two reports mentioned above show that a number of individuals have expressed their discontent over the possibility of increasing fees for their broadband and video-on-demand (VOD) platforms. This concern is particularly relevant to the older population, trying to save in the midst of price volatility.
Remarkably, the trend towards cost constraints is observable in all age segments, and the youngest clientele is the most inclined to select the cheapest products. This average reveals that 35% of households are comfortable with ‘downgrading.’ Meaning, they pay less for broadband even if they receive minimal technical support. Further, 43% are willing to listen to ads to cut the prices of media streaming per month. But it also changes from region to region, as you will see in the next section.
Regional Variations in Buyer Behavior
The research also reveals the variation in users’ attitudes across the territory. Crucially, more than half of US households said they would be willing to move to a cheaper, ad-funded streaming experience. Meanwhile, less than half of South Koreans would sacrifice Internet speed, while only a third of Swedes said they could do the same.
But even against this backdrop of decreasing spending, the public continues to have a high demand for superior-quality providers. The demand for good connectivity has grown, with 44% of consumers wanting more premium content, as opposed to 40% in the previous year. The most considerable percentage in this bracket is the US, at 53%, followed by Spain and the United Kingdom, each at 48%. Read on for more information on trends and demographics impacted by the economic pressures as 2025 approaches.
Trends and Demographics
Paid over-the-top media (OTT) attracts a wide range of people. Their users vary in age, income, education, and cultural background. By understanding these different characteristics, providers can improve how they deliver and promote their products. They can tailor their approach to meet the needs of each user group, encouraging more active use in today’s complex market.
Let’s take a look at some demographics and current trends:
Age and Income Impact: Younger customers are typically described by their familiarity with advanced technologies and preference for more OTT platforms. Older people, on the other hand, are usually more economical when choosing the number of products they welcome into their households and schedules. Flexible and varied options are more important for young people than for older audiences. Older audiences often focus more on getting good value for money from media products.
Education and Occupation: People with higher education have a tendency to follow many content provisions due to their high use of technology and exposure to information. Also, people who have to read at work or need something entertaining during their trip may turn to streaming platforms more often.
Values and Preferences: The research also revealed some values that influenced the use of OTT services, which include pleasure and joy. Users are more likely to invest in paying for products that guarantee unique and meaningful content experiences. These tendencies show the need to consider customer motivation when designing marketing communication strategies.
The Challenge of Choice Overload
However, a new challenge is on the horizon. More and more users are confused by the number of choices of content and subscription platforms. Most people agree that there are too many options when it comes to broadband providers, streaming services, and smart home solutions. In fact, 62% of respondents of the Motley Fool’s State of Streaming 2024 survey feel the competition is excessive.
Furthermore, the blurring of silos increases organizational pressure, where media providers have to optimize and enhance their propositions. As the competition in value added services increases, both the telcos and content players need to ensure that the consumer gets to see their side of it clearly to have their trust and patronage.
Demographic Influences on Paid OTT Usage
Surveyors have found that specific user characteristics influence the use of paid video-on-demand solutions. Key factors include age, income, education, and occupation, which vary by country. Additionally, users’ values regarding relationships and self-actualization are also important. The research suggests that OTT apps should be tailored to fit the cultural preferences and needs of different countries and regions where these services are offered.
Growth Projections in the Entertainment & Media Sector
According to the Global Entertainment & Media Outlook, there is significant growth for the entertainment and media industry, since the report predicted that revenues would total $3.4 trillion by 2028. Other growth segments include advertising, streaming, and other untapped markets, hence resisting the general weakening of consumer spending.
Advertising as a Growth Driver
One of the most apparent discoveries is the trend toward relevance, importance, and orientation toward advertising. Compelled by inertia and competitive pressures, advertisers have switched to media and digital outlays as personal consumption expenditures stall. According to forecasting, the overall ad market will top $1 trillion in the following year. It is especially important for OTT platforms to improve the current advertising level and create more progressive advertising solutions to attract customers.
Rethinking Business Models in Streaming
The market is becoming increasingly oversaturated, and names like Netflix and Disney+ stepping into exploring this new model that mixes subscription and ad services. This shift suggests that more companies in the industry are fashioning multiple revenue sources as essential to future growth. Models of this nature are appropriate within the context of differentiated global markets when consumers’ price sensitivity is likely to differ.
Regional Dynamics and Opportunities
Asian and African markets, especially, are expected to offer the most incredible growth opportunities for OTT products. A number of regions, including India and Indonesia, are recognized as growth areas based on the higher level of people’s digital spending and their interest in local content. This PwC study also highlights that it is a matter of significant importance for key media and telecommunications players wishing to extend their coverage and appeal to a new audience.
The Role of Generative AI
Chapter 3 of the report identifies that generative AI will revolutionize content production and advertising, particularly in the entertainment and media sectors. Currently, the focus is on increasing productivity and reducing costs. The firms that use AI in their operations could set the pace towards driving overall superior consumer experience and, therefore, dominating the market.
Conclusion
The combination of viewer demographic data derived from video-on-demand adoption and global tendencies in the entertainment and media sector evidences a rapidly evolving world. Appreciating user characteristics and the potential of generative AI in future challenges and opportunities that manifest in new consumer preferences as firms seek other ways of generating revenues will be essential.
