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.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

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.

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.”

Hub: Average Consumer Nearing Six Different Video Sources in the Home

Americans have their bases covered when it comes to accessing video and television in the home. New data from Hub Research finds that the typical consumer accesses 5.7 different sources of TV content, including traditional pay-TV service, all available streaming services, and over-the-air reception through an antenna. That number jumped by nearly one full service since 2020, and is almost twice as high as it was in 2019.

Hub says about 80% of TV consumers now use a streaming TV service, 19% higher than the proportion who have a traditional pay-TV subscription (cable, satellite, or telecom). Not surprisingly, the proportion with traditional pay-TV has dropped seven percentage points since the same time last year.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The percentage of consumers using any streaming TV service is up only 2% since last year. The large jump in the average number of services is attributed to an increase in the use of multiple streaming services, and greater adoption of free, ad-supported services such as Pluto TV, The Roku Channel and Tubi, among others.

Almost 60% of all TV consumers use two or more of the top SVODs: Netflix, Amazon Prime Video, Hulu, Disney+ or HBO Max. The percent using two or more top SVODs is up eight percentage points from 2020. Some of that increase is explained by the fact that HBO Max did not exist at this point in 2020, but it still demonstrates that consumers tend to add new streaming services without dropping their existing services.

Hub found that the percent of consumers using a free, ad-supported TV service is up eight points since last year, at 48%.

Don’t expect the size of consumers’ bundles to shrink: one in 5 (21%) say they plan to add new services in the next six months. And among those who plan to add, a strong majority say they’ll add without cutting anything they have currently.

In fact, those who currently have four or more services, and who expect to add new services, are even more likely to say they’ll keep everything they have (78%) without replacing anything.

A bit over half of TV consumers feel their bundle of TV services meets their needs “very well.” But the other half aren’t completely satisfied. With an average of nearly six TV sources at their disposal, nearly half feel their TV bundle meets their viewing needs only “somewhat well” (42%) or “not at all well” (6%).

Report: Smart TVs Account For 50% of TVs Overall; Found in 70% of TV Homes

New data from Hub Entertainment Research shows that smart TVs are now in a large majority of TV homes, and account for over half of all TV sets.

The findings underscore the fact that in the streaming video ecosystem, how consumers access content is changing.

Ownership of a smart TV set is at 70% of TV households this year, a notable milestone in their adoption. Overall, 52% of all TV sets are now reported to be smart TVs, up from 45% in 2020. This indicates accelerated replacement of older, non-smart TVs with smart TVs. Homes with kids or younger adults are more likely to own smart TV sets. Greater proportions of smart TV ownership are found in homes with children under age 18 (59% of all sets are smart TVs), or in homes where the oldest person is under age 35 (61%).

Subscribe HERE to the FREE Media Play News Daily Newsletter!

These findings are from Hub’s “Connected Home 2021” report, based on a survey conducted among 5,000 U.S. consumers. Interviews were conducted in February and March 2021 and covers consumer ownership of many types of media-related technologies.

The Hub study also revealed increasing ownership of TV sets with built-in operating systems from Roku or Fire TV — more than two in five TV households now have one of these sets. More than half (57%) of TV homes now say they have a Roku/Fire TV streaming device or a Roku/Fire TV set — a large increase over our year-ago measure (51%).
Households using televisions streaming content from the internet rose to 77% of all homes from 74% a year ago. Overall, 56% of all homes stream video using a smart TV at least once a month — up from 48% in 2020. In 2019, 42% of consumers planning to buy a new TV set said they would shop for it and buy it in a store; while 27% planned an online purchase.

During the pandemic, the numbers reversed: Only 29% said they planned to buy at a retail store, while 43% planned to buy online.

“The wider adoption of smart TVs and replacement of non-smart TVs turns up the pressure on connected devices like streaming boxes, streaming sticks, and video game consoles,” David Tice, senior consultant to Hub and co-author of the study, said in a statement. “This ‘eliminating of the middleman’ will have a direct impact on how future revenue is split on advanced TV businesses like streaming, interactive shopping, and addressable advertising.”

Report: Pandemic Consumers Sticking With Streaming, Not Returning to Pay-TV

The pandemic has been good for subscription streaming video, and bad for linear pay-TV. That trend is not changing in 2021, according to new data from Hub Research.

As expected, subscriptions to the five most-popular streaming video services has continued to climb since pre-COVID, with HBO Max up dramatically since November. The report said Max has benefited from WarnerMedia’s decision to stream all 2021 Warner Bros. Pictures’ movies on the day of theatrical release — starting with the release of Wonder Woman 1984 last December.

Citing data from a February survey of 3,008 U.S. consumers, ages 14 to 74, who watch at least one hour of TV per week, Hub found that the proportion of consumers who have purchased a first-run movie on streaming has been increasing steadily since last summer, kick-started with the Premier Access premium VOD release of Mulan in September to Disney+ subscribers.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Younger consumers are the most likely to have streamed a first-run movie, with 18-24 the age sweet spot. Once one hits 55 years old, interest in buying first-run films to stream in the home is almost nonexistent.

 

Among survey respondents who added a streaming video service during the pandemic, post-COVID loyalty appears to be strongest for Disney+ (77% of those who signed on say they’ll keep it; only 7% say they’ll drop) and Netflix (73% vs. 4%).

The likelihood of respondents planning to keep Max is lower, with 63% who added the service during the pandemic saying they’ll keep it and 17% saying they’ll cancel — underscoring the idea that focusing on first-run movie releases could be both a blessing (surges in sign-ups when movies are released) and a curse (cancellations once they’ve finished watching).

 

Finally, 89% of February respondents who canceled their traditional pay-TV service during the pandemic, said they would have canceled even if COVID-19 hadn’t happened — the highest proportion Hub Research has seen during the pandemic.

“What’s been most interesting to us in our pandemic-related research has been trying to determine which pandemic-induced changes in TV behavior will persist once life begins to return to normal,” Peter Fondulas, principal at Hub and co-author of the study, said in a statement. “This wave of the study strongly suggests that Americans have grown more than just accustomed to the TV viewing adjustments they’ve made during the pandemic, and are ready to embrace a new, streaming-centric normal.”

One in Four Signed Up for at Least One TV Service During Pandemic

One in four U.S. consumers (28%) said they had signed up for at least one TV service during the pandemic, according to Hub Entertainment Research.

Each of the big four SVOD services has seen a three percentage point or higher increase since just before the pandemic began in February compared to July, according to Hub.

Meanwhile, pay-TV VOD and TVOD saw an increase of six percentage points and three percentage points, respectively, from February to July.

Moreover, consumers said they were likely to continue their same level of streaming TV service viewing, YouTube viewing and broadcast network viewing (especially for news).

“When it comes to the business of entertainment, people clearly intend to continue supporting the streaming TV services they’ve relied on for comfort viewing, the broadcast networks they’ve relied on for news, and the online videos they’ve used for needed distractions,” Peter Fondulas, co-founder and principal of Hub Entertainment Research, said in a statement.

With viewers spending more time watching TV, previews have become a stronger source of TV show discovery during the pandemic, according to Hub. The source is up considerably compared to last year as a method for discovering new shows, while with personal interaction more limited, word of mouth has dropped as a discovery source.

The data cited comes from Hub’s “Predicting the Post-Pandemic” study, conducted among 3,026 U.S. consumers, ages 14 to 74 who watch at least one hour of TV per week. The data was collected in July 2020.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Report: 55% of 4KTV Homes Watch 4K Content

It is almost impossible not to buy a 4KTV in today’s consumer electronics market. Yet, new data from Hub Research found that just 55% of 4KTV households actually watch 4K content.

Citing an online survey of 5,131 domestic consumers, 47% said they had at least one 4K set, but almost half of respondents said they watched non-4K programming.

In addition, 68% of households have a smart TV, with 69% streaming video-on-demand content. Another 14% of those with a Smart TV haven’t connected the unit to the Internet.

Notably, 54% of Smart TV owners also use streaming media devices such as Roku, Apple TV, Google Chromecast and Amazon Fire TV.

“With 4K TV sets, we see the classic case of capability leading content, similar to what was seen with high definition and 3D sets,” David Tice, co-author of the study, said in a statement first reported by Advanced-Television.com.

“With 8K TV sets and ‘Next Gen TV’ broadcast sets soon to debut, manufacturers must be careful that their technological ambitions don’t outstrip the ability of content creators and distributors to serve new platforms — otherwise consumers will tune innovation out.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Among respondents planning to buy a 4KTV in the next 12 months, 32% will do research at a retail store, with 42% purchasing at a store. Another 22% said they would purchase online and pick it up at the store.

Separate 27% said they would purchase the 4KTV online and have it shipped to their home.

“People still want to see and touch before they buy, even though they often don’t intend to use new features,” analyst Jon Giegengack said. “This suggests retail partnerships, like the one between Amazon and Best Buy on TV sets, might be a real opportunity for content providers to drive adoption and content.”

Poll: 44% Say Netflix Vital Source of Video Content

While Disney rolls out its branded “Disney Plus” subscription streaming video service for investors, new data from Hub Research finds that 44% of consumers consider Netflix an important source of content.

The research firm’s “The Evolution of Video Branding” study found that the vast majority of respondents from a January poll of 1,692 consumers in the United States chose Netflix over other over-the-top video services for their video content.

Other entertainment sources include CBS (29%), ABC (28%), NBC (28%) and ESPN (24%).

Among younger respondents (16-34 years-old), 59% opted for Netflix, followed by Hulu (26%), ESPN (24%), HBO (17%) and Amazon Prime Video (17%). Among older respondents CBS ranked first with 41%, followed by ABC (37%), NBC (37%), Netflix (35%) and Fox (26%).

Notably, the report found that while respondents were familiar online TV services such as Hulu with Live TV, YouTube TV, DirecTV Now, Sling TV, and PlayStation Vue, 80% claimed they were unaware of what each platform’s value proposition was.

Indeed, among younger respondents, simply branding video content “original” was enough to make them consider streaming it. And 69% considered Netflix the best choice for original fare.

“It would be easy to explain Netflix’s strong position as a must-have TV source by citing the sheer variety of its content,” Peter Fondulas, principal at Hub and co-author of the study, said in a statement. “Then again, the same can be said of the variety of shows on broadcast networks. Whether it’s a function of a higher level of show quality or of strong branding — or both — Netflix has managed to set itself apart from networks that offer a similarly wide variety of genre choice.”