More than one in three (35%) of people with access to a subscription-video-on-demand (SVOD) service are sharing at least one of their subscriptions with others outside their home, according to new research by Deloitte.

Deloitte’s 2023 Digital Consumer Trends research, based on a survey of 4,150 UK adults aged 16-75, found that account sharing is most widespread among younger users.

More than half of 16-24 -year-olds (51%) are using a video subscription service that is shared among multiple households, with 43% of 25-34-year-olds doing so.

Subscription sharing has also become more formalised, according to the research, with a quarter of users (25%) sharing the cost of an SVOD platform they use with other households. This is also most common among younger users, rising to 34% for 16-24 year-olds and 32% for 25-34 year-olds.

Among respondents who are currently using a service paid for by someone outside their household, the majority (57%) say that they would stop consuming the service if subscription sharing was banned. Only 15% say that they would take out a new subscription themselves if sharing was banned.

Netflix, one of the most successful video streaming subscription services, controversially began cracking down on password and account sharing in May of 2023, to the protest of many users. Previously, the streaming giant had made posts on X joking about the ubiquity of account sharing years before making the dramatic shift to cracking down on passwords shared outside of households.

https://twitter.com/netflix/status/840276073040371712

Paul Lee, partner and global head of technology, media and telecommunications research at Deloitte commented: “Since the birth of subscription-video-on-demand, the sharing of user IDs and passwords with other households has been widespread. As SVOD providers look to implement tighter guidelines around sharing to boost subscriber numbers and revenues, consumers are being faced with the choice of paying more, moving to lower-cost ‘with-ads’ packages, or foregoing their access altogether.

“Restrictions on sharing may well lead to a growth in subscribers and higher revenues. However, it may also reduce the total number of people viewing a show or film, reducing the degree of buzz around that content, in turn diminishing the overall appeal of a service. Word of mouth recommendations – in person or online – have long been key to SVOD’s popularity. That said, some sharers who currently state that they would go without if subscription sharing was banned may ultimately decide to pay for access, so as not to miss out on the latest series of their favourite show.”

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Impact of the Cost-of-Living Crisis

Deloitte’s research found that access to video subscription services in the UK has fallen by one percentage point to 73% in 2023 in the last year, having peaked at 76% in 2021. The fall in access was steepest among 65-75 years olds (to 49% in 2023 from 53% in 2022 and 57% in 2021) whose usage of the subscriptions had surged during lockdown periods.

The number of subscriptions per person is still rising, up from 2.46 in 2022 to 2.62 in 2023, an increase of 6.5%.

However, this growth is at a much slower pace relative to 2018-2021, when the number of subscriptions per respondent rose 60%, from 1.45 to 2.33. This rise in the number of subscriptions per person was likely due to the Covid-19 pandemic which caused many households to stay isolated for long periods of time, and cut off different entertainment options.

Deloitte’s research also revealed that one in five (21%) SVOD subscribers have cancelled a service in the past 12 months, up from 19% the previous year. The rising cost-of-living appears to have been a driver for this, with 27% of respondents saying they cancelled due to the subscription being too expensive (23% in 2022), and 24% cancelling due to rising costs elsewhere (21% in 2022).

Lee added: “Churn is rising and continues to be a significant challenge for SVOD providers at a time when there is growing pressure for services to become profitable, mostly via the lever of increasing subscription prices. This comes at a time when consumers are continuing to be impacted by cost-of-living pressures.

“In order to reduce levels of churn, we may see more SVOD platforms teaming up with other media, telecoms, or financial providers to offer bundled deals; securing new and existing users in longer-term contracts. Meanwhile, a continued focus on producing a diverse range of high-quality content that is accessible for all consumers will be key.

Graphs provided by Deloitte.