The streaming war: how older people determine the winner

Competition among streaming services has become more intense than ever before in recent years. Price wars are being waged, and various subscription models are being introduced to win over consumers. But in a market that is becoming increasingly saturated, the question arises as to whether consumers are actually price-sensitive when choosing their favorite streaming service. The Consumer Behavior Monitor, an initiative of VU Amsterdam and Validators, offers an interesting insight into this. This article takes a look at the battle among streaming services and examines the differences in how young people and those over 35 respond to these developments.

A price war between giants

While consumers can often rely on a single music streaming service for their favorite music, fragmentation in the world of movies and TV shows continues to grow. With an abundance of options, it’s becoming increasingly difficult for consumers to make an informed decision about which services to subscribe to. It’s simply impossible to afford all the available streaming services on an individual subscription basis. To stand out and attract customers, streaming services are trying to outdo each other with pricing and subscription plans. For example, Amazon Prime Video is setting the tone with its pricing, while Netflix and HBO Max offer subscriptions based on video quality, and Videoland offers a cheaper subscription that includes ads.

The battle for the elderly is decisive

Young people (18–34) are known to embrace new technologies and platforms more readily than older adults. A significant proportion of young people have therefore been using streaming services for quite some time, which explains why growth within this target group is leveling off (R²=0.21). On the other hand, older adults (55+) are often slower to adopt such technologies, which has resulted in significant growth in their usage in recent years (R²=0.37). However, the trend in the monitor shows that this growth is now slowing (R²=0.19), while a large portion of this market remains untapped. This indicates a shift in the dynamics of the streaming market, with growth stagnating in what is potentially the largest target group. To maintain and grow their market share, streaming services must now focus on both retaining their existing young users and attracting the “late majority” among older users. The success of streaming services will increasingly depend on their ability to appeal to this large group of older adults, who make up a significant portion of the market.

The giants want to win the battle with low prices

Streaming services have long invested huge sums to attract subscribers. However, they are now forced to adopt a more cost-conscious approach. Originally, streaming services were positioned as ad-free environments where subscribers could enjoy uninterrupted content. Nevertheless, some services are now experimenting with adding ads to generate additional revenue and compete on price. This creates an interesting dilemma: how can streaming services compete with cheaper subscriptions without disrupting the viewing experience with ads? The survey shows that consumers are least likely to accept ads via streaming services (3%). Adding ads could therefore potentially irritate subscribers and detract from the streaming service’s brand perception. This raises the question of whether it is worth offering a cheaper subscription if it comes at the expense of the quality of the viewing experience.

Marcel van Brenk, partner at EY VODW:

“Streaming services have entered a new strategic phase. The goal is shifting from rapid market penetration—where market share is bought—to a sustainable revenue model with healthy margins. This new phase requires a well-thought-out pricing strategy based on data and consumer psychology. Only then can providers implement optimal price differentiation that responds to consumers’ willingness to pay while also taking customer inertia into account.”

But will low prices win the day?

The major streaming services are engaged in fierce price competition. But does this strategy work for all consumers? The report shows that age plays an interesting role in this. Young people (ages 18–34) are often price-conscious and flexible in their streaming preferences. They are willing to switch from one service to another, depending on the available content and attractive promotions. This results in a highly fluctuating spending pattern, as shown in the report. For young people, a competitive price is certainly a draw. On the other hand, people over 35 appear less inclined to switch between streaming services. They place greater value on familiar services, are less price-sensitive, and prefer ease of use, familiar interfaces, and their favorite series. Consequently, this group’s spending remains very stable over time. The battle for this target audience therefore does not seem to be decided by price alone.

A risky strategy

For streaming services, it is risky to focus exclusively on price as a selling point, since this primarily appeals to young people. Although young people are price-sensitive and can be attracted by low prices, they are also less loyal and will easily switch to other providers. It is therefore challenging to retain this target audience. In contrast, it is much more valuable to target older adults. This market is significantly larger in the Netherlands and still offers considerable growth potential and profit opportunities. Moreover, once attracted, older adults are less inclined to switch streaming services quickly, making this group more valuable for long-term customer retention.

A New Strategy in the Streaming War

In this new phase, the focus is no longer solely on offering competitive prices, but on providing other compelling factors. Given that older adults are less price-sensitive and switch streaming services less frequently, it becomes clear that streaming services must differentiate themselves by meeting the needs of these consumers. It is no longer just about the availability of content, but also about how streaming services are presented and positioned relative to one another. Strong branding is essential, with a focus on unique and exclusive content specifically tailored to the interests of the target audience. By positioning themselves as the authority in certain genres or themes, streaming services can build a loyal following among viewers seeking a personalized and tailored viewing experience. For older adults, user-friendliness and an intuitive interface are of great importance. By investing in quality content and offering a seamless viewing experience, streaming services can differentiate themselves from their competitors and build strong brand loyalty among this target audience.

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