- The percentage of U.S. households using streaming services rose to 85% at the end of 2023, exceeding analysts’ expectations of a plateau at 80-83%.
- MoffettNathanson’s research contradicts their previous belief that streaming had reached its peak in the U.S., suggesting potential for further market growth.
- Possible factors contributing to the increase include lower-cost advertising tiers, Black Friday discounts, and Netflix cracking down on password-sharing. Earnings results for major streaming companies are expected soon.
Additional Coverage:
- On the eve of Netflix earnings, a surprising streaming market change is challenging analysts’ ‘peak streaming’ narrative (fortune.com)
Something unusual occurred in the streaming market at the end of 2023. Despite analysts believing that the percentage of U.S. households using streaming services had peaked at around 80% to 83% over the past two years, new data from analytics company HarrisX shows that the statistic rose to 85% at the end of last year after a slight dip in the third quarter. This unexpected increase raises the possibility that there is still room for growth in the streaming market.
MoffettNathanson, a New York-based media investment firm, released a research report stating that this uptick in streamers goes against their previous narrative that streaming had reached its peak in the U.S.
The cause of this increase in streaming is not clear, although there are several feasible explanations according to the analysts. The introduction of lower-cost advertising tiers, Black Friday discounts, and Netflix’s crackdown on password-sharing may have all contributed to the rise in streaming households.
The news about the increase in streaming comes just before the quarterly earnings results for major streaming companies such as Netflix, Comcast (owner of Peacock), and Apple. Other streaming companies are scheduled to report their earnings in February.
There have been indications of streaming fatigue among consumers, with complaints about increased prices, more ads, and decreased content quality. As prices continue to rise and platforms share content with each other, analysts believe that the number of streaming services each household pays for may decrease.
While the increase in streaming penetration during the fourth quarter was a positive surprise, it is uncertain whether it indicates a new opportunity for market growth or simply a small anomaly in a saturated market.
Regardless, the analysts at MoffettNathanson state in their report that streaming ended 2023 with a favorable tailwind.
This article was originally published on Fortune.com.