Hub: 80% of U.S. Homes Own a Smart TV; Consumer Demand for Apple Vision Pro VR Headwear Limited

U.S. household Smart TV ownership increased to nearly 80% in the first quarter ended March 31, from 77% in the previous-year period, according to new data from Hub Entertainment Research. Citing a February survey of 5,026 respondents, Hub found that 62% of TV households are now streaming weekly on internet-connected televisions, up significantly from 47% in 2021.

While separate streaming media player devices such as Roku and FireTV are in half of respondent homes, device growth has stalled compared to all-in-one smart TVs that promote seamless integration for viewers.

In addition, the growth of sound bars is improving the external sound systems for many while they otherwise are hesitant to upgrade to 4K or 8K TV sets.

“With more affordable and higher quality TVs available, it’s no surprise that people are continuing to upgrade their home theaters to better Smart TVs that make watching favorite streaming content easy,” Jason Platt Zolov, consultant to Hub and study co-author, said in a statement.

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Separately, with a reported 200,000 Apple Vision Pro virtual reality headsets sold upon launch, Apple would appear to have established solid awareness (49%) and interest (53%) for the $3,500 device. However, consumer intent to purchase remains low (10%), with interest in the devices around 21%. Respondents still believe the most popular use case for headsets lies in gaming, and not watching television.

“The debut of the Apple Vision Pro headset is a big step toward making advanced headset usage more mainstream — although there is clearly room to grow in further integrating it into traditional living room behavior,” Zolov said in a statement.

Hub: Only 10% of Consumers Feel Fully Satisfied With Streaming Service Recommendations

Just 10% of consumers feel fully satisfied with the recommendations provided by their streaming services, suggesting a significant failure to connect subscribers to the right content, according to Hub Entertainment Research.

This gap not only undermines the value of existing content libraries but also highlights a missed opportunity to enhance viewer engagement, Hub notes.

Connecting subscribers to the right content is critical to maximizing the large investments in that content, Hub notes. And despite the ability to deliver more personalized content promotions online, linear TV appears to be more effective at introducing new content via its promotional strategies than streaming services have been where users are relying more on external recommendations.

The inability to connect consumers with the content they like is contributing to churn, according to Hub.

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Hub: Consumers Struggle to Differentiate Between Streaming Platforms

Hub’s annual “Evolution of Video Branding” study found that consumers struggle to differentiate between streaming platforms in an ecosystem full of options.

Awareness of leading streaming services is universal, but many consumers aren’t confident what differentiates one platform from another.

Nearly 100% of consumers have heard of the major streaming services.  However, as many as half of consumers are not confident they could explain to someone else what makes each streamer unique. Understanding has improved for some services since last year, but others have stalled, Hub found.

Without a clear identity for platform brands, viewers make choices based on the shows themselves, according to the study. Almost 40% of viewers in the survey said they’ve signed up for a new subscription just to watch one piece of content — roughly the same proportion as in 2023 and 2022.  Young people (50%) and households with kids (49%) were even more likely to sign up just to watch one show.

The tendency to subscribe based on content makes production and licensing decisions even more critical, Hub pointed out. In 2024, fewer respondents said they signed up for Disney+ and Max to watch one show — perhaps an after-effect of the strikes and lower content budgets in general. On the other hand, Peacock was the only platform with a statistically significant increase in the number who signed up to watch a specific show. The survey was fielded after the NFL playoffs, where many signed up for Peacock to watch the Chiefs/Dolphins game.   

“As big streamers aim to be all things for all people, viewers are struggling to identify what distinguishes them from each other,” Jason Platt Zolov, consultant for Hub, said in a statement. “Until streamers develop more brand-defining features, viewer loyalty is at risk and consumers will continue to churn as they chase shows across services.”

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The findings come from Hub’s 2024 “Evolution of Video Branding” report, based on a survey conducted among 1,600 U.S. consumers with broadband, age 16-74. Interviews were completed in early February 2024.  A free excerpt of the findings is available on Hub’s website.

Hub Entertainment Research, which celebrated its 10th anniversary in 2023, tracks how technology is changing the way people find, choose, and consume entertainment content: from TV and movies, to gaming, music, podcasts and social video.

Hub Research: Gen Z Prefers Non-Premium Video, Video Games, Social Media on Their Cell Phones

Nearly twice as many Gen Z consumers (ages 11 to 26) use a smartphone to watch video in a typical week as they use a traditional pay-TV set top box, according to new data from Hub Entertainment Research and based on a December 2023 survey conducted among 1,900 U.S. consumers with broadband, age 13-74.

 

 

Given their overwhelming use of smartphones, it’s not surprising the proportion of Gen Z’s entertainment time spent watching TV is less than half that of viewers over 35. Gaming, non-premium video and social media are on par with TV and movies among young viewers.

While older viewers still watch more traditional TV, a third of them said their use of non-premium video has cut into their legacy TV viewing time.

Gen Z viewers spend nearly two hours a day watching non-premium video (short form, user generated, influencer), considerably more than older adults. But respondents aged 35 and older watch significantly more non-premium video than they did a year ago – two more hours a week – largely to keep up to date on news and other current topics of interest.

 

More than 80% of all survey respondents said they use YouTube in a given week. But compared to respondents older than 35, twice as many Gen Z respondents use Instagram and TikTok, and three times as many use Snapchat to watch video.

 

People who use multiple social platforms recognize that each delivers unique benefits. TikTok delivers on short, trendy entertainment, while YouTube’s extensive library is a place to go for informative content.

“There’s no doubt that younger viewers are not as devoted to traditional TV and movies as previous generations have been. This presents one more challenge to legacy media companies as they navigate the future of the video ecosystem,” Mark Loughney, senior consultant for Hub, said in a statement.

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Loughney believes traditional media companies should embrace social media to deliver premium video content to reach younger consumers, including Gen Z.

“It would be futile for them to try to claw back time from non-traditional platforms,” he said.

Hub Research: Content Overload Issues Decline Despite Abundance of Choice

Despite an overwhelming amount of content available to stream, the percentage of viewers overwhelmed trying to find something to watch declined to 8% in 2023 from 9% in 2022, according to new data from Hub Entertainment Research.

In 2023, significantly more consumers in a survey said they like having so many TV shows to watch, and that number is up nearly 50% in just three years.

 

 

 

 

 

 

 

 

At the same time, Hub found that consumers gravitate toward streaming services that make it easier to find content to watch. Notably, widely used content recommendation algorithms apparently don’t sit well with some streamers. Just 10% say the recommendations are highly relevant to their interests, while the remainder think that the suggestions are partly or wholly serving the interests of the service.

 

 

 

 

 

 

 

 

“With streaming services fighting to hold on to market share and subscribers, telling viewers about those shows is crucial,” Mark Loughney, Hub senior consultant, wrote in a blog post. “An obvious opportunity for the streamers is to improve their recommendation algorithms and get more relevant suggestions in front of the viewers they already have.”

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Hub Research: Consumer Interest in Ad-Supported Streaming Video Grows

In a market of myriad subscription streaming video services and rising monthly fees, consumers continue to be attraced to lower-cost, ad-supported platforms.

New data from Hub Entertainment Research found that about 64% of consumers said they would choose an ad-supported option if it saves them $4 to $5 per month on a video subscription. That figure is significantly higher than just six months ago. Another 36% of consumers would be willing to pay upwards of $5 more for ad-free streaming.

The data is based on a November 2023 survey conducted among 3,000 U.S. consumers ages 14-74, who watch at least one hour of TV per week.

Notably, among consumers who say they can’t tolerate video ads, 7% more now claim interest in some commercials to reduce monthly costs compared with six months ago. At the same time, about 40% of consumers would choose a streaming service over another if it had a lighter ad load, i.e., 60 seconds or less.

Hub reports that about 50% of consumers pay more attention when the ad breaks are shorter, and when a streaming service has a more reasonable ad load, its advertisers are seen as higher quality. Regardless, many consumers remain unclear about the types of subscription options available to them on the streaming platforms. The majority of consumers are also unaware of the lower-cost ad-supported options offered by most streaming services.

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“As consumers begin to get hit with the double whammy of needing multiple subscriptions to get their entertainment, coupled with significant price increases, opting in for advertising becomes more appealing to them,” Mark Loughney, senior consultant to Hub, said in a statement. “And as long as providers stick to reasonable ad loads, it’s a win for them and their advertisers as well.”

Hub Entertainment Research Makes Predictions for Streaming and TV Industry in 2024

Hub Entertainment Research has released it top predictions for the television and streaming industry in 2024.

The predictions from Hub analysts are:

 

Continued Foreign Content Growth in the U.S.

  • “With gaps to fill due to the 2023 Hollywood strikes, we will continue to see increased popularity in foreign language content,” said Jon Giegengack, founder and principal of Hub Entertainment Research. “Productions will even take it a step further with modifications so it can work better in the U.S. and other markets. For example, the first season of 30 Coins (Spain production) was almost exclusively in Spanish with relative unknowns, while the second season included several scenes in English, some set in NYC, and added Paul Giamatti as a prominent character.”

Increased Catalog Content and Licensing Across Services

  • “The walled gardens are coming down — Netflix and others will continue to license and promote catalog content from competitor services,” said Jason Platt Zolov, consultant at Hub. “This will help to elevate older titles and mutually benefit larger services’ own retention efforts and the niche brands that gain scaled exposure [e.g. HBO and USA Network (“Suits”) content on Netflix, AMC (“Walking Dead”) content on MAX].”

TikTok Shows Will Deliver the Success Quibi Dreamed About

  • A professionally produced TV series, with ‘A’-list talent, will break through on TikTok.
  • “More companies will also use TikTok to promote new shows, or to create and grow new audiences for licensed content by capitalizing on the trend of watching entire library episodes in short clips,” said Mark Loughney, senior consultant at Hub.

2024 Olympics Drive Innovation (and Fragmentation) in Sports Viewing

  • “The Olympics will again provide a ‘billion-dollar lab’ for media experimentation,” said Giegengack. “VR viewing via Oculus or Apple’s goggles will gain traction. Plus, TikTok and similar platforms will accelerate the disruption of NBCU’s evening coverage on the NBC mothership.”

Netflix Will Finally Have a Gaming Breakthrough in 2024

  • “Leveraging their new hires with experience in major game titles, Netflix will finally deliver a mobile game or even a console/PC game, perhaps related to the next season of Squid Game, that breaks through the ‘zeitgeist,’” said David Tice, senior consultant at Hub.

Hub Research: Smart TV Streaming Use Reached 68% of U.S. Households in 2023

With streaming video on the TV screen the biggest home entertainment change in the past 10 years, streaming via a smart TV has tripled since 2013, from 21% of homes to 68%, according to new data from Hub Entertainment Research.

The company reports that with streaming video use moving beyond early adopters to the general consumer, SVOD and ad-supported streaming services haven’t been the only drivers. The market also been driven by technology changes that have made smart TVs much easier to connect, use and less expensive to buy.

Hub reports the number of TV platforms (streaming, broadcast, pay-TV) used to access streaming content has nearly tripled from 2013, from 2.6 platforms to 7 platforms.

This has created a crisis in content discovery for viewers trying to find their favorite shows. For example, “Yellowstone,” which premieres on Paramount Channel on cable, streams repeats on Peacock, has its prequel series stream on Paramount+, and is now being shown on the CBS broadcast network.

In 2013, defaulting to a pay-TV provider to find content was preferred by 50% of consumers compared with 31% for streaming. Ten years later, 60% of consumers prefer streaming for content compared with 22% for pay-TV.

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“We wonder if broadcast networks as we know them will remain or transition to all streaming,” Hub founder Jon Giegengack wrote in a post. “We fail to see how the next OTA TV broadcast standard, called Next Gen TV, gains traction with consumers who already barely understand the difference between HD and 4K and 8K resolution.”

Hub Research: Subscribers Looking for Streamlined Streaming Video Options

About 88% of entertainment say streaming video subscription services are raising their prices more than in the past, and 77% contend that household budgets are the main reason they are not adding new services, according to new data from Hub Entertainment Research, which cited a proprietary survey of 2,972 consumers conducted in October 2023.

While subscribers appear upbeat about the volume of content available on their SVOD platforms, 77% say it’s too hard to keep track of where to find the shows they want to watch. More than 80% of respondents say that there’s a limit to how many subscriptions they can actually use, even if they could afford to have them all.

 

Indeed, 59% of respondents said they’d be willing to pay for a “one stop shop” app – something that lets them manage, use and pay for all their subscriptions in one place, even though that would be above and beyond the cost of the subscriptions themselves.

 

“Companies who can make entertainment simpler (through things like bundling or universal search) will attract more subscribers,” Jon Giegengack, principal at Hub, said in a statement. “But even more importantly, they’ll be offering a service for which many are willing to pay extra – a huge win for companies seeking to make streaming profitable.”

Hub Research: Netflix Top Retained Streaming Service on Televisions

With smart TV app use reaching parity with set-top devices, the competition for viewer’s default streaming platform has increased, according to new data from Hub Entertainment Research.

In a Hub survey of smart TV app users, 64% said they would most likely keep Netflix, which was just ahead of Hulu at 63%. Among both smart TV and pay-TV set-top box users, Netflix remains No. 1 at 30%, just ahead of pay-TV (28%) and Hulu at 15%.

Notably, Disney+ loyalty remained strong (59%) among smart TV app users, but fell to 9% when combined with set-top box users.

Smart TV app use is growing, with 32% of survey respondents saying default to the app over set-top box devices (30%), and set-top devices (19%), including Roku, Apple TV, Fire TV, etc.

As expected, access to live sports continues to drive legacy pay-TV and default set-top box use. More than 56% of respondents said they default to pay-TV to watch live sports, compared with 45% who default to a smart TV app.

“With the trend toward more live news feeds and major sports offerings on streaming services, two of the primary drivers for viewers who default to the [legacy] set top box are being eroded,” Mark Loughney, senior consultant at Hub Research, said in a statement. “As the smart TV menu becomes a primary destination for more viewers, the importance for providers to have their apps installed on TVs cannot be overstated.”

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