Skip to main content

Can Streaming Video Keep Up with the Metaverse?

metaverse
(Image credit: Pixabay)

NEW YORK— Amid the burgeoning debate about the metaverse and its prospects for dominating the media landscape, Deloitte's Digital Media Trends survey found a number of signs that streaming media might be vulnerable to competition from the metaverse. Those included a notable lack of loyalty to individual streaming services, which face high churn rates among younger subs, and the popularity of video games, which cut into the time audiences spend with streaming services and are beginning to expose younger audiences to the metaverse.  

Overall the report, which covers respondents in five countries, found that streaming video providers face greater pressure to attract and retain subscribers who have become savvier about chasing the content they want and managing the costs they pay. This is especially true with younger generations who have grown up with smartphones, social media and video games, and prefer entertainment experiences that are more social and interactive. For the youngest generations, user-generated social media streams and social video games may be meeting their needs better than streaming video and the popularity of games is providing a gateway into the metaverse, the researchers said. 

"While streaming video on-demand business models look much the same as they did when they were created 15 years ago, social media and gaming companies have quickly evolved their offerings, leveraging technology, and capitalizing on behaviors,” said Jana Arbanas, vice chair, Deloitte LLP and U.S. telecom, media and entertainment sector leader. “Social media is free and available anywhere, anytime, offering both passive and interactive experiences with endless streams of personalized content, without the cost of a subscription. And more people are interacting and socializing in game worlds that host millions of users, brands and franchises, and major non-gaming events. SVOD companies aren't just competing with each other for audiences, they are also competing with different, more social and immersive forms of entertainment."

Other key data points include:  

  • The average churn rate in the United States remains at 37% across all paid streaming video on-demand (SVOD) services. In the United Kingdom (U.K.), Germany, Brazil, and Japan, the average overall churn rate is closer to 30%.
  • In all five countries, Gen Z respondents prefer video games as their favorite form of digital entertainment. For older generations, watching TV and movies at home comes first.
  • In the U.S., 81% of social media users say they use social media services at least daily; 59% use these services several times a day. Across the U.S., the U.K., Germany, Brazil and Japan, people in younger generations (including Gen Z, Millennial, and Gen X) are consistently more likely to say they use social media.
  • Nearly half (46%) of U.S. respondents say they watch more user-generated content than they did six months ago, and half say they always end up spending more time watching user-generated content than they had planned (a number that jumps to 70% among Gen Z).
  • In all five countries, Gen Z and Millennial gamers play an average of 11 hours a week. In the U.S..
  • Churn is highest among the youngest generations as just over half of U.S. Millennials (52%) and Gen Z (51%) have either canceled, or both added and canceled, an SVOD service within the last six months.
  • Twenty-five percent of those in the U.S. have canceled a streaming video service and then resubscribed to the same service within the past 12 months. Respondents say they churn and return either because a new season of their favorite show was released, they got a free or discounted rate, or content they wanted to watch moved to the service. It's global too. In the U.K., Germany, Brazil and Japan, around 22% have churned and returned. Overall, Gen Z and Millennials are significantly more likely to churn and return.
  • Cost is also a factor in retaining consumers who are thinking of canceling. For a reduced cost, some would be willing to sign up for an annual subscription, watch more ads, or wait 45 days to watch a new release. Globally, many people prefer ad-supported options for streaming video that reduce or eliminate their subscription costs.
  • In the U.S., 81% of social media users say they use social media services at least daily and 59% use these services several times a day. Across the U.S., U.K., Germany, Brazil and Japan, Gen Z, Millennials, and Gen Xers are consistently more likely to say they use these services.
  • Forty-six percent of U.S. respondents say they watch more user-generated content than they did six months ago, and half (50%) say they always end up spending more time watching user-generated content than they had planned (a number that jumps to 70% among Gen Zs).
  • About 4 in 10 (41%) of U.S. respondents say they spend more time watching user-generated video content than they do TV shows and movies on video streaming services — a sentiment that increases to around 60% for Gen Zs and Millennials.
  • Seventy percent of U.S. respondents say they follow an influencer, and one-third (33%) say these online personalities influence their buying decisions; that figure jumps to more than half of U.S. Gen Zs (52%) and Millennials (53%). 
  • Social media services are also becoming shoppable retail destinations; more than half of U.S. respondents (53%) and around 40% or more in the U.K., Germany and Japan say they see customized ads on social media for products or services they have been looking for — a number that increases to 72% in Brazil.
  • Whether smartphone, console, or PC, gaming has become huge, and it's taking time away from other forms of entertainment. 
  • In the U.S., more than 80% of both men and women say they play video games, and half of smartphone owners say they play on a smartphone daily. Gen Z and Millennial gamers play the most, logging an average of 11 and 13 hours per week, respectively. Gen X gamers follow closely behind with around 10 hours of gameplay every week, reminding us that it's not just the kids.
  • About half of all U.S. gamers say that playing video games has taken time away from other entertainment activities; unsurprisingly, these percentages increase for younger gamers. This trend is also playing out in other markets, with just over half of gamers in the U.K. (55%), and just under half of gamers in both Brazil (45%) and Japan (44%) also trading other entertainment activities to play video games. 
  • Overall, more than three-quarters of U.S. gamers surveyed also say that gaming helps them relax, while nearly 60% report that gaming helped them through a difficult time. About half (53%) of U.S. gamers say that playing video games helps them stay connected to people. And these games are supporting identity: 61% of U.S. gamers say that personalizing their game character or avatar helps them express themselves.
  • Gaming and music also appear to be closely linked; about half (51%) of U.S. gamers say they often discover new music while playing video games. 
  • About a quarter (23%) of U.S. gamers say they have attended an in-game event in the last year, with Millennials and men being the most likely attendees. Remarkably, 82% of those attending live in-game events also made a purchase because of the event: 65% purchased digital goods and 34% purchased physical merchandise, reinforcing the steady blurring of lines between real and virtual worlds.

The online survey of 2,000 U.S. consumers was conducted in December 2021 and January 2022 and was also fielded for the first time in mature digital entertainment markets, including the U.K. (n=1,002), Germany (n=1,002), Brazil (n=1,000) and Japan (n=1,000).

George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.