January 27, 2020
Who said linear television is dead?
New data from Parks Associates says most American households still consume the majority (topping 50%) of home entertainment video through broadcast television.
The report suggests that while over-the-top video is popular (especially among younger consumers), survey respondents said they spend nearly 20 hours per week on average watching linear TV, compared to nearly four hours on a mobile phone.
Consumers increased by 33% in 2019 the total amount of time spent watching video compared to 2018. The Addison, Tex.-based research group says adoption of OTT video subscription services peaked at 71% of U.S. broadband households.
Consumers ages 18-24 watch as much video on a computer as they do on a TV set (approximately 16 hours per week).
One-half of U.S. broadband households subscribe to Netflix. Amazon Prime Video is second with a 38% adoption rate. About 20% of broadband households use the free version of streaming music service Pandora. Consumers 18-34 spend nearly five hours per week listening to podcasts.
Separately, after streaming consumers covet recorded programming from the DVR, followed by VOD and DVD/Blu-ray Disc. Pay-per-view brings up the rear.
Senior analyst Steve Nason said understanding divergent consumer video (and music) habits is key to driving subscriber acquisitions and minimizing churn among video services.
“Different demographics show markedly different attitudes and preferences,” he said.
Indeed, Parks’ data contends Netflix rates higher among women, while premium OTT services such as Starz, Showtime and HBO Now fare better with men.
Nason said the challenge remains with the coveted 18-34-year-old demo, which is the most fickle yet represents future growth of the industry.
“Younger video consumers’ programming and platform preferences are distinct from older segments, which puts traditional pay-TV providers in a difficult position,” he said. “Changing the traditional pay-TV service model could alienate older, high-ARPU (average-revenue-per-user) customers, but not changing could doom future prospects.”