Hub Research: Online TV Services Have Passed Traditional Cable as Default TV Viewing Source

More than half of TV viewers in a survey said their TV default was an online streaming service — e.g., a subscription-based streaming service such as Netflix, a free streaming service with ads such as Pluto TV, or a live TV streaming service such as YouTube TV.

That’s according to Hub’s annual “Decoding the Default” study, which since 2015 has tracked the TV source that consumers turn on first when they’re ready to watch.

Online services were 16 points more likely than a traditional cable, satellite or telco service to be consumers’ TV default — an advantage that’s twice as large as it was just a year ago.

In the survey, 55% said an online service is the first source they turn on, up five points from 2020, while 39% said they turn first to a traditional pay TV service set-top (including live viewing, DVR, or VOD), down three points from last year. The remaining percentages each year default to viewing over-the-air, from an antenna.

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Meanwhile, Netflix has lost momentum as viewers’ default source over the past year. Until 2018, Netflix was on track to surpass traditional pay TV, single handedly, as viewers’ first stop for TV viewing. But since then, the proportion defaulting to Netflix has leveled off, and it has actually lost three points since 2020. Although no single other streaming TV service comes close to Netflix as a default for TV, the four other most popular streamers (Hulu, Amazon Prime Video, Disney+, and HBO Max) collectively gained four points in just the past year.

TV default differs dramatically by age. Young consumers were by far the least likely to turn first to live TV channels when they were ready to watch — and the proportions have continued to drop over time. In the survey, barely more than 1 in 10 18-34 year olds defaulted to live channels. But notably, the proportion defaulting to live TV was lower than it was in 2019 in every age group.

Netflix’s overall drop as a default source since last year is especially pronounced among younger viewers. Instead, that group embraced the other streaming services as their top TV destination, with 31% of 18-34 year olds making Netflix their TV home base, down eight points since last year.
Instead, 24% of young viewers turned first to one of the other top five streamers, up an equal eight points since 2020.

“Like most other phenomena in the new TV landscape, the TV sources that viewers’ treat as their TV home base seem to be in a state of constant flux,” said Peter Fondulas, principal at Hub and co-author of the study, in a statement. “Just when it looked like Netflix was set to become the center of consumers’ TV universe, other streamers have stepped up their game to change the narrative.

“What has remained constant, however, is the critical importance of being consumers’ home base for TV in the first place. If and when we reach the point where a critical mass of consumers decides they’ve hit their TV service maximum, the last service to go when viewers begin to scale back is the one service they turn on first.”

Hub’s “Decoding the Default” study was conducted in August 2021 among 1,616 U.S. consumers with broadband, age 16-74, who watched at least one hour of TV per week.

Tubi Sponsors Fox NFL Postgame Show ‘The OT’

Fox Entertainment continues to aggressively market its ad-supported FAST platform Tubi, incorporating the platform as presenting sponsor of the network’s Sept. 12 postgame “The OT” segment following the “NFL on Fox” first-week televised game between the Denver Broncos and the New York Giants.

Fox Corp., unlike other media companies, has eschewed the subscription VOD business in favor of Tubi, which it acquired for $440 million in 2019. Seeking the platform as a digital extension of its ad-supported TV network, Fox is hoping to generate $350 million in incremental revenue in 2021 — $1 billion annually in the next few years.

To do that, Tubi needs viewer eyeballs. Millions of them.

At the end of the fiscal year (June 30), Tubi surpassed 3 billion hours streamed, up more than 50% over the prior year. During the recent quarter, total view time surpassed 900 million hours, up more than 40% over the prior-year quarter.

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Driving the increased viewership: Primetime TV content, including the first digital access to Fox reality competition series “The Masked Singer” and “Lego Masters,” among others.

“I cannot emphasize enough the importance of total view time as the critical metric for ad supported streaming,” CEO Lachlan Murdoch said on the company’s latest fiscal call. “It is the best measure of burgeoning engagement on Tubi and correlates directly to the monetization of the platform.”

Last month, Tubi and Fox Sports announced the launch of “Sports on Tubi” in the U.S., affording viewers access to 10 live streaming channels for different sports, including professional football, baseball, soccer, collegiate sports from the ACC and Pac-12 Conferences, as well as nearly 700 hours of VOD content.

OTT.X Panelists Discuss Growth and Challenges of OTT Market

While the OTT market is growing exponentially, OTT players are facing several “pain points,” including the need to improve content discovery, better manage data and compete in an ever-more-crowded marketplace, said panelists Sept. 1 during the OTT.X Fall Summit in Los Angeles.

Clunky content discovery is still a problem for consumers and the OTT services that serve them.

“How do we shorten the distance between discovery and either purchase or consumption, either in terms of clicks or in terms of satisfaction to the customer?” said Chris Yates, GM of Redbox on Demand, adding it’s challenging “helping a customer find what they want to watch quickly and in the business model that matters to them.”

And the problem of discovery is only getting more complicated, especially in the ad-supported space, where the number of players is exploding, noted Colin Petrie-Norris, CEO of Xumo.

“Today across the ecosystem there are maybe 1,500 linear free ad-supported TV (FAST) channels across all the platforms,” he said. “That’s going to be 10,000 in three years’ time.”

Unlike during the rise of broadcast and cable, the barriers to entry in the digital ad-supported marketplace are lower.

“Linear TV or cable TV used to be one of those places you had to have a lot of money to get access to,” Petrie-Norris said. “It is now being democratized. To get a linear national, even global TV channel is now possible for a much more humble budget.”

And that makes for a competitive landscape.

“The biggest challenge is that the FAST space is a gladiator pit where only the strong will survive,” said Erick Opeka, chief strategy officer at Cinedigm.

“Building our audience is the biggest pain point in the sense that there’s an increasingly fragmented distribution environment,” said Philippe Guelton, president of Crackle.

Getting the viewership data for digital content and evaluating what to do with it is a challenge as well.

Some platforms are “walled gardens” and do not share data, Opeka noted.

“In this ostensibly purely digital environment, you would think aggregating data and getting insights from the ecosystem would be much easier,” he said.

Data can also be overwhelming.

“We’re drowning in data and getting really good at making smart decisions out of it is tough,” he said.

Despite the challenges, the market for digital ads is hot.

“We see much more advertising demand than we have supply, which in my 30 years in working in ad-supported media I’ve never seen before,” Guelton said.

“I think advertisers today, frankly they just love the space,” Petrie-Norris added. “It’s all digital. You can track results. … It’s almost magic.”

Still, panelists said that delivering those ads could use some improvement.

Yates pointed to the “coming back soon” screens that pop up sometimes for minutes at a time when an ad doesn’t load.

“That’s an experience that the industry needs to solve,” he said.

Ad placement could also become more attuned to the viewer, perhaps with a smaller load while a consumer is casting around for something to watch and with more ads once the consumer is hooked.

Panelists also addressed the growth of PVOD — a higher-priced digital rental early in or concurrent with the theatrical window — during the pandemic as theaters shuttered.

“The real question is how long is this model sustainable,” Opeka said. “We’ve seen some pretty fantastic revenues out of the few [titles] that we’ve experimented with, way beyond what we would have thought possible … three or four times what we would have thought would be the potential pre-pandemic.”

“The one thing I can predict is if the revenues for PVOD continue to be as astronomical even for independent releases I can almost guarantee the market will be flooded with them,” he added.

Rakuten TV Inks Alchimie Deal to Increase FAST Channel Access Across Europe

Spain-based free ad-supported streaming television (FAST) service Rakuten TV Sept. 2 announced a content license deal with French-based Alchimie to expand the latter’s channels across Europe.

The new channels — HUMANITY, Luxe TV, MMA TV, Big Names, Motorsport TV, Télézap, Explore by TVPlayer and Krime — will be available in multiple territories across Rakuten TV’s 42-country footprint. L’Atelier des Chefswhich has already launched as part of Rakuten TV’s new culinary channels, also is available. More Alchimie channels will be added to the Rakuten TV portfolio in the near future.

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“Partnering with Alchimie is another milestone in our European expansion and reinforces our commitment to deliver localized and relevant content to all audiences,” Teresa López, head of content at Rakuten TV, said in a statement

“Alchimie is in an excellent position to provide Rakuten TV with entertaining themed channels across Europe with regularly refreshed, high-quality content in local languages,” added Nicolas d’Hueppe, CEO at Alchimie.

Rakuten TV linear channels are currently accessible for free on the Rakuten TV app on Samsung and LG Smart TV devices. Rakuten TV is part of Rakuten Group, which focuses on e-commerce, digital content, and communications. Rakuten is the official partner for FC Barcelona, the Golden State Warriors, Davis Cup and Spartan Race.

Report: Ad-Supported Streaming Market Share Surged, SVOD Declined in the First Half of 2021

The rise in AVOD and free ad-supported streaming TV use among consumers continued to attract viewers, marketers and generate commercials in the first half of 2021.

New data from FreeWheel found that streaming services accounted for 45% of all ad views through June 30, overtaking TV Everywhere — pay-TV’s longstanding attempt to combat over-the-top video with ad-supported on-demand viewing for subscribers.

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Connected TV accounted for 60% of total ad views with Roku and Fire TV devices continuing to lead market share with 43% and 26% of CTV views, respectively. Entertainment programming led the premium video ecosystem, with 92% of ad views, according to the report.

FreeWheel found that similarly to linear TV, digital platforms offer diverse content appealing to a broader consumer base, with 51% of ad views driven by live TV, with on-demand content at 37%.

Live content feeds are the cornerstone of the FAST business model and have become popular with consumers since they are free, have myriad channels selections, and limited commercials. According to a recent consumer survey, 20% of respondents said they would be interested in using free streaming platforms to replace their SVOD services.

Indeed, SVOD pioneers Netflix and Hulu each saw their domestic market share decline in the second quarter, ended June 30. Market leader Netflix’s share fell from 37% to 29%, while Hulu dropped to 19% from 22%. Disney+, HBO Max, and Paramount+ saw market share increases to 17% (from 16%), 11% (from 8%), and 8% (from 6%), respectively.

“New technology, political tensions and a global pandemic in 2020 transformed and accelerated how people access, consume and respond to media and advertising and we’ve seen this evolution continue into the first half of 2021,” read the report. “Advertisers, marketers and their content, distribution and technology partners can expect the change that was spurred in 2020 and is persisting into 2021 to continue, if not accelerate.”

FreeWheel said changing consumer viewing and buying behavior will push the continued evolution of data capability, accuracy and availability.

“The industry is at the beginning of a long-term, data-driven evolution of how advertising and marketing are done,” read the report. “Keeping up in the industry will require a focus on the data that provides insight into viewer behavior and what impacts it, and enables the reach, targeting and reporting that marketers crave.”

Data: FAST Revenue to Reach 216 Monthly Users, $4.1 Billion in Revenue by 2023

The rise in AVOD and free ad-supported streaming television (FAST) platforms and viewers suggests consumers don’t mind watching commercials to stream free content.

New data from nScreenMedia — sponsored by Verizon Media — contends the domestic FAST industry will drive ad revenue earned by online channels from $2.1 billion this year to $4.1 billion in 2023, including generating 216 million monthly active users.

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FAST platforms include Pluto TV, Tubi, IMDb TV, Peacock, HBO Max, The Roku Channel, Xumo, Crackle, Redbox Live TV and Shout! TV, among others.

Sunnyvale, Calif.-based nScreenMedia’s white paper reports that FAST content features from 13-14 minutes of commercials per hour, with ad breaks occurring every 6-to-9 minutes, with 3-to-6 ads per break. FAST viewers report spending as much as 20 minutes per day with the aforementioned services.

“There was a time when many forecast the death of linear TV viewing,” Colin Dixon, Chief Analyst at nScreenMedia, said in a statement. “However, it is now clear that the format continues to deliver value to viewers. The FAST market has just begun a long period of rapid expansion.”

The data would seem to support the investment in the FAST market made by video platform providers such as Verizon Media, whose brands include Yahoo, TechCrunch, AOL and Engadget, among others.

“At Verizon Media, we’ve witnessed the evolution of OTT and the rapid adoption of FAST platforms as our customers look to increase their audience reach and provide greater pricing flexibility to consumers,” said Ariff Sidi, GM and chief product officer of Verizon Media Platform. “We are encouraged by [the] market validation as we continue to deliver … for both subscription and ad-supported video consumption.”

Roku Bowing 23 New Original (Quibi) Programs Aug. 13

Roku Aug. 9 announced a new slate of Roku Originals will be available to stream on The Roku Channel beginning Aug. 13. The lineup features 23 titles, including four all-new premieres, available exclusively on the free ad-supported platform in the U.S., Canada and the U.K. 

The series come from shuttered streaming service Quibi, whose 75-program portfolio Roku reportedly acquired for around $100 million earlier this year. Among programs launching are the Emmy-nominated show “Mapleworth Murders from writers Paula Pell, John Lutz and J.B. Smoove.

“While it’s only been a few months since the launch of Roku Originals, the response has been overwhelming,” Brian Tannenbaum, head of alternative programming at Roku, said in a statement.

Pell said making “Mapleworth Murders” was a “glorious crime procedural romp through a field of pure nutbaggery.”

“We are so incredibly excited that … millions of viewers can watch a lesbian spinster and dipstick sheriff and deputy try to solve some of the most ridiculous daily murders in an otherwise charming town,” Pell said. “Full disclosure, we wrote almost all of it in a melatonin twilight.”

Roku Originals continue to help drive strong viewer engagement for The Roku Channel since its launch in May. The top five streamed TV programs by unique view on The Roku Channel this summer (from May 20 to July 18) were all originals. The Roku Channel saw strong growth with streaming hours more than doubling year-over-year in Q2 2021. According to Nielsen streaming reach ratings for the month of June, The Roku Channel was the No. 6 streaming channel by household reach in America, coming in after Disney+, Hulu, Amazon, YouTube and Netflix.

The complete lineup: “&Music,” “The Andy Cohen Diaries,” “Benedict Men,” “Elba vs. Block,” “Eye Candy,” “Fierce Queens,” “Floored,” “Gone Mental with Lior,” “Mapleworth Murders,” “Memory Hole,” “Nice One!,” “Nikki Fre$h,” “Run This City,” “The Sauce,” “Sex Next Door,” “Singled Out,” “Skrrt with Offset,” “Squeaky Clean,” “The Stranger,” “Survive,” “Thanks a Million” (Season 2), “What Happens in Hollywood” and “Wireless.”

Gannett Relaunches ‘USA Today’ Streaming Video Platforms

Gannett is relaunching of its over-the-top video properties, which include USA Today News and USA Today SportsWire.

Since launching OTT channels in 2018, Gannett has expanded to more than a dozen free ad-Supported streaming TV (FAST) platforms, including Xumo, The Roku Channel, Amazon Prime Video, Tubi, and Samsung TV Plus, among others. The expansion has provided substantial growth in audience and engagement reaching more than 25 million monthly views, and 200% increase in average view duration across all platforms in the last year.

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“We’re taking USA Today to all audiences in the U.S. and around the world,” Caroline Harris, VP of digital distribution at Gannett, said in a statement.

To help facilitate the expanded digital presence, Gannett is working with media technology company Amagi.

“Amagi thrives on making high quality content accessible to multi-screen audiences around the world,” said co-founder Srinivasan Ka. “Our partnership with Gannett is enabling them to tap into a wide network of connected TV households, providing linear TV viewers access to USA Today’s premium sports and news content while enhancing monetization opportunities.”

The channel programming features award-winning editorial documentaries from the USA Today Network, franchise series produced by USA Today Studios, Gannett’s premiere video production and development group, and news from insiders and the most trusted journalists in the world including the following series:

  • Humankind — In every episode, Humankind reveals the stories of ordinary people in extraordinary circumstances: people acting with grace and heroism and summoning incredible determination and dedication to a cause.
  • Problem Solved — In this series, experts at Reviewed and USA Today are learning and testing new products along with the latest viral hacks, that help make consumers’ lives a little easier.​
  • Entertain This! — The latest news in entertainment from USA Today, including pop culture, celebrities, movies, music, books and TV reviews.
  • Just the FAQs and What We Know Now — Two highly visual and complementary explainer series covering top stories and trends in news, politics, and science.
  • Sports Seriously — A weekly series that brings together the unmatched reporting and insight of USA Today Sports and Sports Media Group, and access to the top athletes and names in sports. With a fresh format, style, and substance, Sports Seriously takes a conversational approach to the biggest stories, events, and cultural touchpoints in sports, and celebrates the moments that make us all sports fans.

 

Separately, USA Today will stream the national USA Today High School Sports Awards on Aug. 5 at 8 p.m. ET. The show, co-hosted by Michael Strahan and Rob Gronkowski, is the culmination of 105 regional and statewide awards programs celebrating elite high school athletes, coaches, and teams.

Vizio Updates Free TV Streaming Service

Vizio Aug. 2 updated its free streaming video service, WatchFree+, with a new program guide and an expanded content offerings based on user data.

“WatchFree+ provides audiences with access to the channels and programming you expect with cable, but in a free streaming environment that makes it easy to personalize and customize the entertainment experience,” Katherine Pond, VP of business development, said in a statement.

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To support what it characterizes as a “growing consumer shift” to streaming, Vizio’s WatchFree+ offers 24/7 access to live and local programming, premium content and an ever-expanding library of hundreds of free channels across movies, news, sports, lifestyle, music, kids, family and multicultural content.

The platform includes new navigation features that allow for advanced search and discovery of the latest and best free entertainment. Streamlined search also enables users to access movies, shows and more in fewer steps, serving up content that’s curated around each viewer’s interests.

The program guide supports voice navigation for new SmartCast TVs that come with the latest remote control. Additionally, audiences can use voice navigation through the free SmartCast app for iOS and Android devices.

The latest update leverages Vizio’s “Inscape” viewing data to inform programming preferences with context and is key in the redesign of Vizio’s full-screen program guide and curated channels.

Using first-party viewership data, the program guide now includes custom curated channels, a new “Featured” category with seasonal programming, themed collections, and pop-up channels, including:

  • Fork & Flight: A unique mix of today’s most popular culinary and travel TV shows alongside top digital creators and trendsetters. Fork & Flight will take you to the kitchen, the farm and France — all in one day.
  • Investigation: Unlocks the door to real crime and the unknown, giving viewers a behind-the-scenes look at investigations, as well as in-depth explorations.

Hub: Ad-Supported SVOD Tiers Gaining Popularity

As the cost of stacking multiple streaming subscriptions rises, free-ad-supported TV (FAST) platforms are gaining users. But new data from Hub Research’s annual “Monetization of Video” study suggests that tiered platforms — where viewers can choose between a paid, ad-free option and a less expensive (or free), ad-supported option — appeal to the largest cross-section of viewers.

In the survey, conducted in June among 1,607 U.S. TV viewers age 16-74, respondents were divided into two groups. Each group was asked to choose from three hypothetical streaming services with identical content.

Group one chose from a paid, ad-free subscription, a free-with-ads service, and a paid, limited-ads subscription (“fewer ads than you’d see on regular live TV”).

Group two chose from the same options, except the limited-ads service was replaced with a paid service offering two tiers to choose from: ad-free and ad-supported.

According to the data, almost twice as many consumers chose the service with tiered options (36%) as the service with a limited-ad option only (19%).

The percentage of respondents choosing the tiered service was just as high as the percentage choosing free-with-ads, and higher than the percentage choosing the service with only a single, ad-free option.

In a question asked before the ad-supported tier of HBO Max launched in June, almost 40% of current HBO Max respondents said they’d consider switching to the ad-supported tier. But more than a quarter of those who don’t subscribe to Max said they’d consider signing up with a less-expensive ad-supported tier as an option.

“It’s true that some TV viewers will do almost anything, including paying a premium, to avoid ads. But there are many who will choose ad-supported TV if it saves money or lets them watch a show they can’t watch somewhere else,” Jon Giegengack, one of the study’s authors, said in a statement. “Tiered plans give viewers control of their experience. Whether they watch with ads or not, everyone is getting an experience they chose, and not one chosen for them.”