Streaming video might have made the turn from a go-go industry to a mature business, according to a new report from MoffettNathanson senior research analyst Michael Nathanson.
Looking at data from HarrisX, Nathanson noted that streaming penetration dipped to 84% in the first quarter from 85% in the fourth quarter of 2023.
“Whether this marks a new plateau or whether there is additional room for streaming to increase its penetration will be a key question for investors going forward,” Nathanson said.
The average number of streaming services subscribed was 3.8 per household, flat compared to prior surveys.
“With American households now accustomed to habitually churning on and off services, it may be hard to grow this number significantly going forward,” Nathanson said.
HarrisX data also showed streamers by and large put out less content in Q1 compared to a year ago, partially because of the Hollywood writers’ and actors’ strikes but also due to a pullback in spending. (Netflix is in a league of its own when it comes to output quantity, Nathanson noted, with 90 original shows released, down from 95 a year ago.)
Max and Peacock were the only platforms to increase content output year over year. Peacock had 17 shows and Max had 14 new seasons.
The drop in content led to a step down in daily engagement. The biggest drops on a percentage basis were suffered by Hulu, Paramount Plus, Max, Netflix and Prime Video. Disney Plus and Peacock had the smallest declines.
Some daily users turned into weekly users, with Hulu gaining the most weekly users.
“While Max makes up for mediocre daily usage with pack-leading weekly usage, the same cannot be said of Peacock, which is at or near the bottom of the group for both metrics,” Nathanson said.
Speaking of Peacock, Nathanson said that Comcast NBCUniversal’s decision to pay $110 million for an exclusive NFL playoff game resulted in greater penetration, although daily and weekly engagement fell.
Nathanson also noted that the integration of Hulu into Disney Plus “has yet to yield a significant uptick in overlap between their user bases.”
Based on the data, “on the whole, absent major content moves, it feels like we have reached maturity for the group,” Nathanson concluded.
