(BPT) - Consumers have more options for digital media entertainment than ever before, but what kind of content are they looking for, how are they finding it and how are they interacting with it? Each year, Deloitte – a global professional services organization – surveys consumers to answer these questions.
In its latest report, titled “2022 Digital Media Trends, 16th edition: Toward the metaverse,” Deloitte surveyed consumers globally and found there is a growing preference for more personalized, interactive, and social experiences, especially among younger generations. Below are five key findings that underscore this trend.
1. Consumers are tired of chasing content
Despite the sizable content budgets of streaming video on demand (SVOD) services, consumers are growing more frustrated with SVOD content discovery and subscription fees. SVOD services often require consumers to juggle multiple subscriptions at increasing costs. But on social media platforms, content discovers the user, offering free passive and interactive experiences with near-infinite streams of personalized content that are continuously refined.
2. SVOD services struggle to attract and retain subscribers
SVOD providers face greater pressure to attract and retain subscribers who have become savvier about chasing content and managing their subscription costs. The average churn rate (the rate at which consumers have cancelled, or both added and cancelled, a service during the past six months) in the United States remains consistent at 37% across all paid SVOD services. In the United Kingdom, Germany, Brazil, and Japan, the average overall churn rate is closer to 30%. In an effort to compete, consumers may find media companies diversifying their approach, offering ad-supported tiers and bundles, or pairing premium content with more immersive experiences.
3. Growing popularity of user-generated content
Short-form and user-generated social video feeds are incredibly engaging. Nearly half (46%) of U.S. consumers say they watch more user-generated content online than they did six months ago. Fifty percent (50%) also say they always end up spending more time watching user-generated content online than they had initially planned. This figure jumps to 70% among the youngest generation, Gen Z. About four in 10 (41%) U.S. consumers surveyed spend more time watching user-generated video content online than TV shows and movies on video streaming services, a sentiment that increases to about 60% among the younger generations (Millennials and Gen Zs).
4. Social media usage continues to rise across generations
In the U.S., 81% of social media users use social media services daily, and 59% use these services several times a day. Across all five countries surveyed, Gen Zs, Millennials, and Gen Xers are consistently more likely to say they use these services. Also, 70% of U.S. respondents say they follow an influencer online, and more than half of U.S. Gen Zs and Millennials surveyed say online personalities influence their buying decisions.
Social media platforms are also affecting consumer spending habits. About 53% of U.S. respondents and around 40% in the U.K., Germany, and Japan say they see ads on social media for products or services they were searching for, a figure that jumps to 72% in Brazil.
5. Younger consumers prioritize interactive experiences
Younger generations who have grown up with smartphones, social media, and video games prefer entertainment experiences that are more social and interactive. User-generated social media streams and social video games may meet their needs better than streaming video.
According to the report, Gen Z respondents prefer playing video games as their favorite entertainment activity in all five countries. In the U.S., Gen Z and Millennial gamers play the most, logging an average of 11 and 13 hours per week, respectively.
Looking to the future
As streaming video audiences juggle more subscriptions and higher costs to chase entertainment, social media is free and available anywhere, anytime.
Deloitte’s report suggests that to prepare for the next generation of digital entertainment, streaming video companies should think hard about how people socialize around entertainment. Will younger generations and the generations to follow them dismiss entertainment that isn’t social or interactive in some way? Or will the passive and somewhat isolated experience of streaming video always offer a meaningful form of entertainment? Only time will tell.
To learn more about the 2022 Digital Media Trends, 16th edition: Toward the metaverse survey, visit Digital Media Trends for the full report.