The Great Reaggregation Lockdown, Demand and Consolidation
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The 20,000 Foot View: removed the constraints imposed by peak attention, leading to a surge in home-based entertainment consumption and streaming adoption. Fortuitous timing, enforced home working and the end of the commute, tied in with the need to entertain home-bound children, has greatly accelerated direct-to-consumer adoption. Later adopters have now become familiar with streaming; the next step is to optimise the user experience for consumers exiting traditional pay-TV. The groundswell for this has just begun, and the new players are well placed to enable this reaggregation process as they move beyond initial post-launch growth.
Key insights
- Streaming video consumers are now mature, unlike the ecosystem
- Netflix’s ability to maintain significant growth in 2020, with a increase in subscribers million), was testament to the increased and sustained demand for long-form video streaming entertainment
- Growing demand is also evident for multiple subscriptions, which increased from penetration in 2018 to in 2020
- The new entrants led by Disney and Apple are driving fragmentation
- We are now entering phase three of the great reaggregation as the normalisation of video streaming drives a consumer need for reconsolidation
- Older video audiences are acquiring streaming-centric behaviours at a fast-growing rate, with year olds now making up of all US binge viewers
- As streaming adoption matures, reaggregation needs to begin in earnest in order to avoid high churn from digital laggards as they move along the streaming adoption curve
Companies and brands mentioned in this report: Amazon, Amazon Prime Video, Apple TV+, Comcast, Disney, Disney+, HBO Max, Netflix, Paramount, Paramount+, Peacock, Warner Bros., Warner Media