What does platform saturation mean for kids' SVoD?

By Nick Richardson 02-08-2022

The founder and CEO of UK-based The Insights Family talks about why platform saturation means popular streamers can no longer assume continued loyalty from subscribers.

The VoD market has truly disrupted the way kids engage with and consume content. The next generation require on-demand services that enable them to access their favourite content whenever they want. The demand for this service has led to increased competition and saturation of the market, where numerous big players are fighting for dominance.

Netflix, the original disruptor in this industry and number-one TV platform globally amongst kids aged six to nine, has lost subscribers for the first time in more than a decade. The company recently revealed it had lost over 200,000 members over Q1 2022. Our data shows that the number of 6-9s who use the platform has fallen by 8% since 2020. Over the same period, the number of kids in this demographic who use Disney+ has increased by 45%.

Competition in the streaming space has meant it is no longer feasible to rely on continued loyalty from subscribers. The saturation of the streaming market has led families to more carefully pick and choose between VoD platforms in order to tune in to their favourite shows and movies. For 6-9s globally, the top factors they consider when choosing a VoD platform are that it hosts their favourite shows (57%), the variety of content available (29%) and the new content available (27%).

Although 6-9s in the US are marginally more likely to use Netflix (58%) than Disney+ (57%), this age group is 22% more likely to name Disney’s service as its favourite platform. The reason given for this is that the platform provides access to their favourite shows (28%). In contrast, Netflix fans are 15% less likely to favour the platform for this reason.

In the UK, 70% of 10-12s’ top 10 favourite characters are available to them on Disney+, ranging from Marvel Cinematic Universe heroes such as Spider-Man and Iron Man, to characters like Homer and Bart Simpson following Disney’s acquisition of 20th Century Fox in 2019. In contrast, Netflix has no original characters in this top 10, underlining the importance of compelling content to engage consumers.

Disney’s ownership of brands such as Spider-Man is key to the popularity of Disney+ among kids

In other streaming markets, such as the music industry, the content library across competing platforms is largely the same. Competition is derived from the different features and functionality the platforms offer to users. For example, Spotify offers socially focused marketing events such as its annual Spotify Wrapped, whereas Tidal offers lossless audio streaming for an additional fee.

The nature of IP ownership in the VoD market means content is unique to the service providing it. For example, Disney shows are only available on Disney+. Rather than competing on attributes that would make the market competitive, various VoD platforms are more akin to a series of competing IP ownerships. As more players enter the market, the consumer has to pay an additional fee in order to have access to all of the content available across platforms.

It is becoming increasingly unreasonable to assume kids and families have the necessary income to subscribe to every VoD service, especially as more companies are creating bespoke services for their own IP. According to our data, the average six- to nine-year-old globally only has access to one SVoD service. In many ways, the VoD market is now closer to representing the very service that was initially displaced, where cable TV bundles different content in packages for additional costs.

The Insights Family’s new Mapping the World of Content report discusses platform saturation in further detail and also explores other trends such as the creator economy and digital touchpoints for brands. It is the first report in a series focused on exploring opportunities for brands in the kids and family ecosystem, produced by the company’s new Industry Knowledge team. Download it for free here.