Nielsen: AVOD Outpacing SVOD Consumption

While SVOD giants Netflix, Amazon Prime Video, Hulu and Disney+ generate the headlines, ad-supported VOD is quietly tracking significant consumer appeal.

Ad-supported streaming varieties offer consumers yet another video option amid a vastly fragmenting sea of choice. In addition to appealing to consumers who feel maxed with subscription services, ad-supported options may become more popular among cash-strapped consumers affected by rising unemployment brought on by the novel coronavirus pandemic.

New Nielsen data finds streaming consumption across all video options is up more than 74% from last year — accelerated by COVID-19 — underscoring the reality streaming video is the present and future of content creation. Streaming-capable households spend 25% of their time streaming video content — suggesting the home entertainment distribution channels is gaining traction among older (55+) consumers.

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In terms of video streaming distribution, Netflix, Hulu, Amazon and YouTube maintain the lion’s share of the pie, with Disney+ already grabbing 4% after just coming to market in November 2019, according to Nielsen. Other distribution channels, however, account for nearly another 25% of total streaming distribution.

The surge of SVOD platforms in 2020 has drawn a line in the sand about how many subscription services consumers are willing to pay for. Undoubtedly, the COVID-19 pandemic upended everyday (and night) routines, forcing households to seek out new ways to pass the time, and streaming came to the rescue.

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That shift may have altered media consumption permanently, particularly for segments of the population that weren’t streaming before (i.e., 55+).

“That’s because despite warm weather and the post-lockdown freedom to leave our homes, the time we’re spending streaming video remains well above year-ago levels,” Nielsen wrote. “Even more impressive is the fact that engagement with Internet-connected TVs remains above pre-COVID-19 levels. Comparatively, many traditional media consumption trends, such as linear TV viewing and traditional AM/FM radio tune-in, are nearly back to seasonally normalized levels.”

With much of the U.S. re-opened for business, Americans are still binging on video streaming content. During second-quarter 2020, Nielsen said Americans watched more than 142 billion minutes of streaming video. And while the aggregate growth is notable and speaks to the overwhelming popularity of video streaming, the year-over-year growth in minutes watched outside of content from Netflix, Hulu, Amazon, Disney+ and YouTube was more than 57%, accounting for more than 12 billion minutes.

Digital is where media consumption is rising, and as new digital video content offerings have come online, consumers have embrace them, according to Nielsen. And while global ad spend will dip this year amid the pandemic, the February 2020 Nielsen Total Audience Report forecasts that digital media spending should top $500 billion globally by 2023.

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