Jul 12, 2019

Streaming's bounty of choices overwhelms consumers

Illustration: Sarah Grillo/Axios

Consumers are so stressed about finding the right thing to watch on their streaming services that, after a few minutes scanning the options, many decide to watch something they've already seen, revert back to traditional TV, or turn the tube off altogether.

Why it matters: As more companies jump into the streaming wars, the choice-overload problem could alienate customers, drive away subscribers and limit the industry's growth.

By the numbers: U.S. adults typically spend a little over 7 minutes searching for something to watch on a streaming service, according to a new report from Nielsen's MediaTech Trender, a quarterly consumer tracking survey focused on emerging technology.

  • Younger adults ages 18–49 take between 8 and 10 minutes to browse before giving up, while older adults typically spend around 5 minutes.
  • Overall, 21% of respondents say that "when they want to watch, but they don’t know exactly what," they end up giving up the hunt.

Be smart: Streaming services — like Netflix and Hulu — that categorize programming by category, not brand, may have a tough time competing with traditional TV for easy choice-making by consumers.

  • More than half of users (58%) said they were more likely to go back to their favorite traditional TV channels if they didn’t know what to watch on a streaming service.
  • Meanwhile, only one-third of adult respondents say they use the content menus on their subscription streaming services to actually help them find content.

Flashback: Psychologist Barry Schwartz introduced "the paradox of choice" in his 2004 book of that name, finding that a surfeit of options paralyzes people instead of delighting them.

The big picture: Not only is choice difficult within streaming services, but selecting which service to subscribe to is becoming harder, as more and more big entertainment and tech companies start to create their own services.

  • On Tuesday, WarnerMedia revealed that its new streaming service, HBO Max, would include the entire library of "Friends" exclusively, as well as a plethora of other new and old titles.
  • This new service joins a long list of on-demand video services that consumers will have to choose from, both with their wallets and time.
  • Data from media research firm Frank N. Magid and Associates finds that people are only willing to spend around $38 monthly on streaming services. The average subscription streaming service costs anywhere between $7 and $17 dollars per month.

The bottom line: Stressed-out viewers become less engaged.

  • According of the same survey, when consumers know exactly what to watch they are three times more likely to view content (66%) than when they do not know what to watch at all prior to viewing (22%).

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