Horowitz: Gen Z Consumers Use More Than 6 Streaming Services, Prefer Professional Video Content

Generation Z, the 13-24-year-old demo with a penchant for streaming YouTube videos and social media, is growing up — at least when it comes to their entertainment content choices. New data from Horowitz Research finds that the Gen Zers are heavily engaged with professional, full-length TV content.

The study — based on an online survey of 812 Gen Z respondents — suggests Gen Z audiences are almost as likely to be viewers of professionally produced TV content as they are non-professional content (e.g., short clips, user-generated content, video game live streams, videos on social media). About 80% of the demo report watching short- form videos weekly, while 70% say that they watch TV content every week. The data are similar for both older (18-24 year-old) and younger (13-17 year-old) Gen Zers.

More than half of Gen Z consumers typically watch professionally produced, long-form TV content on their TV sets, while more than 33% say they usually consume TV content on their smartphones.

Not surprisingly, the smartphone is the most coveted portable device, used among 65% of the Gen Z demo to watch non-TV content. Yet, about 20% usually watch non-TV/short-form content on their TVs, with older members of the Gen Z demo watching more content on the TV screen.

Horowitz found that the average Gen Z streamer accessed more than six streaming services, up from five in 2020. Usage of free ad-supported streaming TV (FAST) services is on the rise, with the Roku Channel, Tubi, and Pluto TV being the most popular FAST services among this demo.

The most popular TV content genres included movies, animated series/cartoons (not anime), dramas, and music-related content, with older consumers reporting higher viewership across most of these genres than younger users.

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“What is interesting to us is thinking about how [Gen Z] might bring their short-form behaviors to the big screen, and to their expectations when viewing long-form content and what that might mean from a content development, user experience, and revenue perspective,” Adriana Waterston, EVP and insights and strategy lead for Horowitz Research, said in a statement.

Horowitz is hosting a free webinar on Gen Z’s behaviors around video content, social media, and sociopolitical issues, and how brands can engage with them.

Horowitz: Netflix Users Sharing Passwords Willing to Pay for Service

After years of indifference, Netflix in 2023 has begun cracking down on non-subscribers using third-party passwords to access the service. Still, the move may not lose Netflix viewers, as more than 70% of surveyed non-subscribers in a new study said they would be willing to pay for Netflix if their “free” access was terminated.

New data from Horowitz Research found that the higher the perceived market value for a SVOD service, the more likely users sharing passwords are willing to pay for legitimate access when confronted zero alternatives.

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New York-based Horowitz, which surveyed 1,600 adult respondents in 2022, found that 18% of respondents shared access to Netflix while 42% paid for the service. Another 15% shared access to Prime Video with 44% paying for the service themselves. Horowitz said data suggests 33% of Netflix users and 25% of Prime Video users access a third-party’s password — tallies similar to Hulu, Disney+, HBO Max and Paramount+.

Notably, 83% of Netflix users and 81% of Prime Video users rate their service as excellent, while 63% of Showtime Now users and 60% of Britbox users feel the same way about their respective platforms.

Adriana Waterston, chief revenue officer and insights and strategy lead for Horowitz, contends Netflix and Prime Video have long proven their value to their subscribers because of the former’s extensive library of original content, and Prime Video with its tie-in to other Prime member benefits.

“While Netflix’s crackdown on password sharing will likely lead to user loss, the majority of subscribers will stay with the service,” Waterson said in a statement. “Netflix will need to keep its perceived value high … [which] will certainly be a challenge moving forward as their programming costs continue to increase and as they add commercials.”

Study: Only Half of U.S. TV Content Viewers Still Subscribe to Traditional Cable/Satellite Service, But Streaming Facing Headwinds

Half (51%) of TV content viewers in the United States subscribe to a traditional cable/satellite service, down from 63% a year ago, according to the just-released “State of Pay TV, OTT & SVOD 2022” report from Horowitz Research.

In 2020, cable/satellite service penetration was at 81%. 

Meanwhile, the share of TV content viewers who rely only on streaming has continued its upward trajectory, with almost four in 10 (37%) of TV content viewers paying for an SVOD service, but not for cable or satellite. That’s an increase from 30% in 2021.

Notably, the study also found a slight drop in subscriptions to SVOD services, even as the number of SVOD services has increased over the past few years and as the share of streaming compared to traditional viewing grows. In the 2021 study, three in four (74%) of TV content viewers said they subscribe to at least one SVOD service; in this year’s study, 62% said they subscribe (an additional 10% have access to additional SVODs by sharing/borrowing passwords). This decline is due in part to a drop in Netflix subscriptions.

Meanwhile, the number of TV content viewers leveraging free, ad-supported sources for TV content (antennas as well as free streaming services), has remained unchanged. Two in three (66%) said they use these services, on par with the number who subscribe to at least one SVOD.

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What is on the rise, the study found, is the monthly cost consumers are paying for streaming services, driven by an increase in the number of services available in the market, and price increases from Netflix, Hulu Plus Live TV, Disney+ and others. The Horowitz study found that on average, streaming services subscribers (including those with SVOD and/or vMVPD services such Sling TV or Hulu Plus Live TV) report spending $75.80 per month on their services — up $26 per month from the reported average spend last year. And, despite the proliferation of services, four in 10 (40%) TV content viewers in the 2022 study said they “have a hard time finding something to watch.”

With costs on the rise, perceptions of streaming as a better value than cable/satellite are beginning to erode, the study found. While in 2021 49% of consumers without cable/satellite services felt they were “saving a really good amount of money” by just relying on streaming, this number dropped to 39% in the current year’s study.  

The study findings suggest that churn, already an issue for streaming services, will become an even bigger challenge moving forward as consumers become even more cost-conscious, according to Horowitz. Almost one in five (18%) SVOD subscribers surveyed said they are planning to cancel at least one of their services, as are almost four in 10 (42%) of those subscribing to a vMVPD.

“It seems the streaming honeymoon is coming to an unavoidable end,” noted Adriana Waterston, chief revenue officer and insights and strategy lead for Horowitz Research. “What seemed like a fantasy come true — thousands upon thousands of hours of top-notch content available on-demand for almost no money and few, if any, ads — was never going to be a sustainable business model, given what it costs to produce and acquire great content. The next phase in this maturing industry will be a reset. We expect to see more advertising in free or low-cost, ad-supported tiers, such as the one Netflix is planning to offer, and more consolidation of services and subscriptions like what just happened with Discovery and WarnerMedia. Hopefully, for the consumer, this will translate to some cost savings, more predictable spending, and an even better user experience across the board. It will also translate to new opportunities for brands and advertisers to connect with audiences in new and innovative, interactive ways.”


Black Audiences Increasingly Cutting the Cord

Black audiences are increasingly opting to cut the cord, a new Horowitz study finds.

Though black households were shedding cable at a slower rate as compared to the overall market, Horowitz data shows that over the past four years, MVPD penetration among black households has declined from 88% in 2017 to 61% in 2021 — a 25% decrease. Among black consumers who are cord-cutters, half have cut the cord within the past three years.

In 2018, 69% of black households were “content omnivores,” a term Horowitz coined in 2017 to describe households who are the hungriest for content and therefore pay for traditional MVPD services as well as a variety of streaming services to access all the content they want.

In this year’s study, only one in three (33%) black households are content omnivores; almost four in 10 rely on combinations of streaming services, digital antennas, and/or vMVPD services to access TV content (one in four rely only on traditional MVPD services and do not stream at all).

Income and age play important roles in platform choices, according to Horowitz. Black households with lower incomes are less likely to subscribe to traditional MVPDs, and 80% of black cord-cutters believe that they are saving at least a decent amount after having done so. Older black TV content viewers are more likely to subscribe to MVPD services (65% among those 50-plus) and to use antennas (28% among those 50-plus) than younger black TV content viewers (57% and 12% each, respectively).

Despite shedding the MVPD cord, there is still interest in many of the features of the multichannel experience. For example, 64% of black TV content viewers say that they enjoy flipping through channels, and the study finds that black TV content viewers still highly value live television, local broadcast news, national news and sports content — the mainstays of traditional providers.

Culturally relevant content is also in high demand among black audiences, with 60% of black consumers watching content geared to black audiences at least weekly.

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“Horowitz has long asserted that black consumers are some of the best customers for entertainment content and services,” Adriana Waterston, Horowitz’s chief revenue officer and insights and strategy lead, said in a statement. “These audiences should not be taken for granted. Many companies are late to the game, only now focusing on the black audience in the context of BLM and new diversity mandates. To not be viewed as simply pandering, companies who hope to serve the black audience must make meaningful and sustained investments, not just in programming and marketing, but in community outreach and support, in order to earn this valuable audience’s trust.”

Nearly Two-Thirds of U.S. Latino Spanish-Language Content Viewers Stream

A recent Horowitz Research survey found 80% of U.S. Latino TV content viewers are streamers, including nearly two-thirds (64%) of Latino Spanish-language content viewers.

Eight out of 10 (80%) subscribe to at least one SVOD service. On average, Latino streamers pay for four streaming services.

According to Horowitz, half of Latino households (49%) subscribe to both a traditional MVPD and at least one streaming service, with younger, multilingual, bicultural, family households the most likely to leverage both MVPD and SVOD platforms to meet their households’ needs, which includes demand for both English and Spanish content.

Six in 10 Latinos watch Spanish-language content at least occasionally, according to the study. Notably, viewing of Spanish-language content is as high among bilingual, bicultural Latinos as it is among their Spanish-dominant counterparts. And, almost one in three (29%) English-oriented, highly acculturated Latinos watch in Spanish at least occasionally, according to the study.

While traditional (broadcast and cable) used to be the main source for Spanish-language content, the Spanish-language TV landscape is transforming, according to Horowitz. The past couple of years have ushered in an explosion of Spanish and Latinxo-themed streamed content, starting with the success of Netflix’s “Narcos,” “La Casa de Papel,” “Elite,” “La Reina del Sur” (a Telemundo series) and other popular shows.

Horowitz noted Latino audiences can now access Spanish-language and Latinx-themed content across a wide variety of free and paid services: Peacock, with a selection of Telemundo content; Amazon Prime Video, which is making substantial investments in Spanish and Latino-themed content; FuboTV, offering Spanish-language sports programming; Discovery, which offers various Spanish-language mobile apps; Pluto TV, with free programming and channel surfing in English and Spanish; Pantaya; OnDemandLatino; and the new Univision/Televisa venture Prende TV, among many others.

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“Latinx consumers have long been underserved in the streaming space, but this is completely changing now,” Horowitz’s Adriana Waterston, SVP of insights and strategy, said in a statement. “There is a market for all sorts of streamed Spanish and Latino-themed content, ranging from traditional telenovelas to content that speaks to the sensibilities of younger, bilingual, bicultural U.S. Latinos. Importantly, much of this content will not only appeal to Latino consumers but other audiences as well.”

Latino audiences continue to value the benefits of traditional MVPD services when making their subscription decisions, such as accessing live TV content, watching television episodes the day they air, and having access to local, national and international up-to-date news coverage.

However, two in three Latino consumers surveyed perceive that the quality and variety of Spanish content available in the streaming ecosystem is as good or surpasses that which is available through MVPD services, which could lead to more Latino households becoming cord-cutters, according to Horowitz. The Horowitz survey shows that already 22% of Latino TV homes have cut the cord in the last three years.

“Latino households have been some of the most loyal customers of MVPD services, driven by the desire to have access to the most robust selection of both English and Spanish content,” Waterston said in a statement. “As streaming services amp up their Latino-oriented offerings, traditional players will need to find new ways to retain their value proposition among this audience.”

Report: Video Streamers Covet TV Antenna

It may be a digital world driven by over-the-top video distribution. But as millennials opt away from traditional pay-TV, they are also embracing the old-school TV antenna, according to a new report.

Horowitz Research suggests that while TV viewers in the U.S. are experimenting with online TV services such as YouTube TV, Sling TV, DirecTV Now and PlayStation Vue, among others, they are increasingly opting for digital antennas.

The study finds that 34% of TV content viewers are accessing OTT video content via digital antennas, which came about following the federal government’s mandated switch from analog to digital TV transmission.

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Antenna owners are younger (40% of antenna owners are 18-34 vs. 31% of total TV content viewers) and skew male (59% vs. 49% of total TV content viewers).

Among non-pay-TV subscribers, 51% report owning an antenna. Antenna owners are more likely to subscribe to one of the three major SVOD services (78% subscribe to Netflix, Hulu, or Amazon Prime Video, vs. 67% of TV content viewers). Antennas are also popular in traditional pay-TV subscriber households: 30% of traditional subs report owning an antenna.

Horowitz’s data suggest antenna owners spend 19% of their time using an antenna, 44% streaming, and 32% through an MVPD, watching live, DVR, VOD and packaged media

“With today’s stronger signals and advances in technology, along with improved design aesthetics, antennas are re-emerging as an inexpensive and practical way of accessing TV content,”  Stephanie Wong, director of insights and strategy, said in a statement.

With new technology allowing for the recording of over-the-air content, including TiVo’s Bolt OTA, Plex, and Amazon’s Fire TV Recast, Horowitz said consumers are replacing cable with SVOD services and over-the-air broadcasts.

With the pending rollout of ATSC 3.0, which would allow for 4K resolution and enhanced sound to broadcast TV, Adriana Waterston, SVP of insights and strategy for Horowitz, contends pay-TV’s perceived advantage in picture quality and reliability is waning.

“As the broadcast industry works to improve its standards and achieve widespread adoption of ATSC 3.0 — about 40 markets by 2020, according to NAB — that advantage gap has the potential to shrink, with adoption of over-the-air viewing increasing,” Waterson said.

Cost, User Experience Driving OTT Video Adoption

With pay-TV subscriptions down 10% among respondents in a new survey from Horowitz Research, the study found just 71% of 18-34 year-olds subscribe to a traditional pay TV service (cable, satellite, or telecom), compared to 75% of 35-49 year-olds and 81% of TV viewers 50 and older.

Although TV viewing remains bullish — respondents watch an average of 6.5 hours of TV a day — the reality that there are many lower-cost services competing for consumers’ video budgets is impacting the perceived cost-benefit ratio of traditional pay-TV.

According to the study, 74% of cable TV subscribers, 78% of satellite TV subscribers, and 80% of fiber TV subscribers say that they are satisfied with their TV service overall.

However, when asked how “worth it” the TV services they subscribe to are, cable, satellite, and fiber TV subscribers are less likely to say that their TV service is worth it compared to most over-the-top services.

Seventy percent of satellite and fiber subscribers and 62% of cable subscribers said their service is worth it; between 8% and 13% said their pay-TV is not worth it. On the other hand, 91% of respondents with Netflix said the service is worth the money; 83% among Hulu subs.

Digital pay-TV providers Sling TV and Hulu with Live TV also fare better than traditional pay-TV, with 79% of Sling subs and 77% of Hulu with Live TV subs voicing their approval.

In addition to exploring the value of TV and video services, the study also asked how interested TV viewers would be in either switching to a service like this from their cable/satellite/fiber service (if they currently had pay-TV service) or subscribing to one (if they did not currently have pay-TV service).

Nearly half (48%) of pay-TV subs expressed interest in online TV; which rose to 58% among 18-34 year-olds. While the data is based on a broad, general description of online TV and may not translate into actual cord-cutting, it does indicate a willingness among consumers to explore these services, and cost plays a major role.

Nearly 93% of respondents interested in online TV cited lower cost as a key factor. In addition, viewing and tech features among OTT services remains highly valued and, in many cases, more user-friendly than many linear TV set-top box guides.

“Over-the-top services like Netflix, Hulu, and Amazon Prime are … essentially VOD ‘on steroids,’ and they have tended to supplement, rather than cannibalize, services offered by traditional providers,” Adriana Waterston, SVP of insights & strategy for Horowitz, said in a statement.

“[Online TV does] compete directly with traditional providers by offering television, including sports and local channels in many markets, DVR service, and other elements of traditional TV, but for a lower price and with the app-driven, consumer-friendly OTT experience. It is incumbent on traditional players to continue to assert their value proposition at the same time as they pivot their businesses to serve consumers’ evolving expectations.”