Gaming is also generating more user-generated video for social media and streaming services. Among frequent gamers, 45% are watching others stream their gameplay; 38% are streaming their own gameplay; 49% are watching videos about gaming tips, cheats, and tutorials on a monthly basis. This expansion of activities illustrates both the ecosystem of content around gaming and the shape of gaming as a social activity.
Game companies have inadvertently become immersive, interactive social media services. When we asked gamers about important factors related to their gaming experience, more than half said having positive interactions with other players and being able to personalize my game character or avatar were important, followed not far behind by chatting or socializing with other players and meeting up with friends online to play together. This was consistent from Gen Z to Gen X and underlines the ways that multiplayer games transport people into their gameworlds.
Among frequent gamers, about 40% of Gen Zs and Millennials play against other people online every day, and almost as many Millennials (37%) are meeting up online to play with teammates daily. Further underlining this virtual embodiment, 43% of frequent gamers are purchasing skins, like virtual clothing, tattoos, hairstyles, and gestures and dance moves known as “emotes,” to personalize their game characters monthly.
But this growth in the social side of gaming has a downside. As with other social media activities, it has also enabled interpersonal conflicts that are impacting experiences. Nearly half of Gen Z and Millennial gamer respondents have witnessed or personally experienced bullying or harassment while gaming. Among those, over 40% reported and/or blocked the harasser. A bit fewer defended the person who was being bullied or directly confronted the person bullying or harassing. For a quarter of gamers who experienced harassment or bullying, their mood and mental health were negatively impacted, and they developed negative feelings toward the game or brand.
Despite these potential downsides, younger generations have grown up connecting through digital networks, engaging with digital and interactive entertainment, and relating to the world through a social lens. Gaming is meeting these expectations with unique, immersive experiences that can put players in the starring role. For streaming video providers, understanding social gaming and creating strong relationships with gamers may be critical to future growth.
Beyond courtship: The future of digital media and entertainment
These factors, combined, point to an important shift in what customers are paying attention to and how they are choosing to engage and be entertained. Streaming video will likely continue to be a dominant force, especially as leading services are now pursuing global markets. However, SVOD offers a simple experience of leaning back and watching high-quality video content. Any social elements are deferred to the “second screen”—mobile—which, for many, is really the first screen. Interactivity on SVOD is an early experiment. It may or may not make sense for SVOD to offer social and interactivity directly in their services, but they will likely face greater competition in courting younger generations and keeping them as lifelong subscribers if they don’t integrate a social element in some way.
In the near term, SVOD players should address churn and retention among diverse segments in different markets, and shift from measuring subscribers to understanding how to unlock the lifetime value within their customer bases. In the future, they should develop strategies to stay connected with people who prefer social video and social gaming, which could be accomplished through partnerships, acquisitions, or simply developing a really great social media department.
Explore more pricing tiers, loyalty programs, and VIP exclusives
To address cost sensitivities and subscriber attrition on SVOD services, providers should introduce more pricing tiers while retaining premium content for full-paying subscribers. When we asked about the types of bundle options that would keep users from cancelling a streaming service, the top answer was a loyalty program that offers discounts on other services and products I want. Membership and loyalty programs can enable low-paying users to earn access to content reserved for premium users. Providers can even consider VIP programs that offer exclusivity, like first-run movie releases to the highest-paying tier.
Look to bundles and reaggregation
Around a quarter of paid SVOD subscribers in our survey reduce their streaming costs by getting services through bundles, or by looking for deals and promotions on streaming services included with other goods they purchase. After membership programs, respondents said they would reconsider cancelling a paid SVOD service if it was bundled with a streaming music or video service—or if it offered free or discounted access to theme parks or movie theaters.
By aggregating more SVOD services under one hood, people may become less frustrated chasing content across so many services. Giving customers more than one reason to stay with a provider could also reduce churn. To appeal to younger generations, providers may need to bring other services under their umbrella beyond streaming video. But tread carefully: 41% of consumers are not interested in bundles. The freedom and flexibility that people won by unbundling cable TV may be hard to reverse.
There’s more than one way to make customer experiences more interactive and dynamic. Streaming video may or may not need to offer social affordances, but competing against so much content may require staying in the social conversation, driving trending topics, working with creators and influencers, and developing continuous touchpoints with social audiences. In developing content portfolios, media companies should also look to short-form and user-generated streams, both as channels for their own content and to find young creators.
However, if SVOD does not evolve into a connected social experience, it may not be able to generate the stickiness and network effects social media enjoys. It may not be surprising, but half of respondents who use social or online services say that staying connected to friends and family is one of their top five reasons for using them. About a fifth or more cite sharing thoughts, concerns, or views, finding like-minded people or groups, or interacting with people who have different outlooks or interests as reasons for using these services. SVOD in its current form offers none of this.
By the numbers, the future of video is social.6 And it’s already here. The biggest differentiator for SVOD is the quality of its content, but how long can providers spend so much without getting more value from their customers? And how can they keep subscribers onboard without offering more than streaming video? The future of entertainment may likely be rebundled to deliver video, news, music, and gaming, surrounded by a social ecosystem and driven by individual preferences.