Study: 51% U.S. Consumers Pay for Online Video Service

On the day Disney launches its branded subscription streaming video platform, a new report finds more than 50% of survey respondents pay for streaming video, compared with 34% who pay for traditional pay-TV.

Online video platforms such as Netflix and Amazon Prime Video are watched more often than Pay-TV or free-to-air services, with U.S. consumers watching video on social media as frequently as the legacy TV platforms.

The findings are from the 2019 Grabyo Global Video Trends Report based on 9,690 consumer responses across the United Kingdom, United States, France, Italy, Spain, Germany and Australia.

The company’s website says it provides broadcasters and rights holders with “strategic guidance and support” to help them capitalize on commercial opportunities in sharing live video across the Web, social and mobile platforms.

Amid industry consolidation in the U.S. among content holders and distributors, the report found accelerating adoption of online streaming services, with Netflix now in 1 in every 2 households.

The decline in domestic pay-TV subscribers is evident in the consumption habits of consumers. Audiences are accessing video on social media as often as Pay-TV and more frequently across online streaming platforms.

The data shows a bifurcation in viewing habits across the market: If U.S. consumers don’t watch Pay-TV, they typically choose digital alternatives instead.

The launch of Apple TV+, Disney+, ESPN+ and HBO Max on March 31, 2020, is a response to this change in consumer viewing preferences, but this comes with a huge shift in business model for the leading players, according to Grabyo.

As consumers move away from pay-TV packages towards loss-leader priced online subscriptions, 75% of U.S. consumers watch video most often on YouTube, which reflects the move towards smaller screen device viewing and younger viewers moving away from traditional TV.

The report suggests consumers want flexibility, convenience and access to content across all devices at a low price point.

“OTT services are moving into the mainstream and are set to become the primary destination for video viewing in most markets,” CEO Gareth Capon said in a statement.

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Capon said 60% of survey respondents watch video most often on a smartphone. A generational shift in media consumption is happening that will have a profound impact on the structure of the TV market and the business models for video.

“Consumers under 25 now watch video on social media platforms more often than TV,” he said.

The move to online streaming and social media does not signal the immediate death of TV, but it does signal what needs to change, according to the report. Consumers want video services which are low-cost, available everywhere with a usage model that allows audiences to escape the TV schedule if they choose.