August 7, 2019
Consumers in the United States continue to migrate toward over-the-top video distribution with streaming viewing hours in the second quarter (ended June 30) more than double (130%) from a year ago, according to new data from Conviva.
While major markets dominate overall domestic streaming consumption, Dallas, Atlanta, and Phoenix are the top 3 cities when streaming video consumption is normalized by population — ahead of tech hubs Boston, New York, and San Francisco.
The percentage of televisions connected to the Internet increased 143%, largely driven by Roku with 173% growth and 43% market share of connected TV viewing. Amazon Fire TV was up 145% in viewing with an 18% share. Apple TV was up 129% to account for 10% share.
“In 2019, streaming is coming into its own,” read the report.
Video-on-demand now accounts for 66% of all viewing hours, up from 59% last year. While mobile devices command near equal share of live versus on-demand viewing at 22.8% and 23.7%, respectively, PCs garner more share of on-demand viewing at 16.5% versus 12.6%, while connected TVs command more share of live at 56.5% versus 53.1%.
Notably, Roku accounted for the majority of all live viewing via connected TV with 53.8%.
The report found that online TV services such as DirecTV Now, Hulu with Live TV, PlayStation Vue and Sling TV saw triple-digit growth in viewing year over year.
Market dynamics, including consolidation and the increase of hybrid business models from media companies such as NBC Universal, Apple, Disney and WarnerMedia, suggest there is even more room for growth and innovation as the lines between business models blur.
Conviva said the growth gap between studios content creators and online distributors closed even more in Q2 than previous quarters, but content aggregators continue to best other services in terms of consumption as well as quality, with viewing hours up 168% year over year.
Not to be outdone, publishers in the United States also recorded impressive growth of 137% in viewing hours year over year. The overall growth in consumption is indicative of headroom for existing streaming services alongside future entrants.
“Increased competition will also spur innovation and, as the industry saw with hybrid models with subscription and ads, more convergence in business models,” read the report.
Facebook and YouTube saw 15% more videos posted as news media led social media with the largest growth in average total video views, up 197% year-over-year. Entertainment led in growth of views per video, up 99%.
While ad-supported VOD and online TV continue to gain traction among consumers, Conviva found that ad buffering remains a “silent engagement killer” among users.
The difference between a viewer making it past the 5% mark in the video stream depends greatly on whether or not the ad flows correctly. In addition, the average streaming ad length reached 24.87 seconds despite the fact viewership drops significantly with 20+ second ads.
“The TV industry of yesterday was built on inflexible standards, antiquated measurement, and limited data. Streaming offers the vast potential of a rapidly maturing market, flexibility, targeting, and data to understand the audience like never before.”