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.

Co-Viewing Apps Attract Younger Viewers

New TV research from Hub found that streaming apps with co-viewing baked in, as well as third-party apps, prove popular with young audiences.

Hub Entertainment Research’s third annual “Evolution of the TV Set” report  found a quarter (23%) of viewers say they have watched via a co-viewing app or service this year, up from 2020 (20%) with 41% of viewers age 16-34 saying they’ve used a co-viewing app, compared with 23% of those age 35-54 and only 3% of those 55 or older.

Amazon Watch Party is the most commonly used co-viewing app (44%). The next most popular apps are two adapted from other uses: Discord, popular among gamers (28%), and Zoom, the web meeting service made ubiquitous by the pandemic (27%).

Those age 35-54 (57%) are more likely to use Amazon Watch Party (AWP) than co-viewers age 16-34 (37%), and men (52%) more likely to use AWP than women (31%).  Young co-viewers age 16-24 are less than half as likely to say they use AWP than adults 35-54 (24% vs. 57%). And one-third (33%) of those 16-24 use Discord, compared with one-quarter (26%) of older viewers age 35-74.

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“Co-viewing apps and services are becoming increasingly important, no doubt driven in part by recent pandemic experiences,” David Tice, senior consultant to Hub and co-author of the study, said in a statement. “Content distributors and streaming services that help enable this behavior will increase their appeal to young adults overall, and in particular young men. This is an important consideration with the advent of fully or partially ad-supported streaming services and the desirability of these key demos to advertisers.”

Hub’s “Evolution of the TV Set 2021” report is a survey of 2,519 U.S. consumers. Interviews were conducted in late May and early June 2021.

Research: Consumers Flocked to HBO Max in December to Watch New Movies

Data from Hub Entertainment Research showed strong growth for HBO Max in December, thanks in large part to the Christmas Day release of Wonder Woman 1984.

HBO Max’s share of new TV service subscribers nearly doubled in December, Hub noted, with 13% of consumers who signed up for any TV subscription in December signing up for HBO Max. In November, that percentage was just 7%.

Among those who added HBO Max in December, 19% said they added the service to watch movies — including 12% who signed up to watch “theatrical” movies, according to Hub. The total movie percentage in November was only 3%, meaning December saw a six-fold increase in movies as a reason for subscribing to HBO Max.

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Although Disney+ didn’t see the same level of subscriber growth between the two months (new subscribers held steady), Hub found the reasons for adding Disney+ shifted dramatically in December, on the heels of Disney’s content announcement. Among those who added Disney+ in December, 12% said they signed up to watch movies; in November, the movie percentage was just 2%. In a new question asked in December, 13% said they signed up to watch exclusive franchise content (from Star Wars, Pixar and Marvel) — as frequently mentioned as “movies.”

 

Survey: One-Third of Consumers Signed Up for a New TV Service Since Summer

From July to November, one-third of consumers in Hub’s “Predicting the Pandemic” research survey had signed up for a new TV service, up six points from the summer.

The second, just-released wave of the study shows how the pandemic has accelerated the already well-established shift to online consumption of entertainment content.

During that same period, one in four canceled a TV service, up five points. All told, 40% had made at least some change to their TV subscriptions by November, nine points higher than in the summer.

The top four streaming services saw the strongest net increases among those who either added or dropped. Netflix and Disney+ were the most likely to see a net gain in November with half of those who made changes to their TV services adding Netflix and one-third adding Disney+. Meanwhile, only single-digit percentages dropped each of these services.

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On the other hand, consumers were much more likely to drop a live TV service than to add one. Half of those who made TV service changes dropped a live TV streaming service (such as YouTube TV, Hulu + Live TV or Sling TV). One-third dropped a traditional cable, satellite or telco TV subscription. Fewer than one in five added either type of service.

Use of free, ad-supported TV platforms (AVODs) continued to accelerate, including the newly launched, free version of Peacock. AVOD use continued the upward trend seen in the summer with the percent using each major service up since July (and use in July was higher than February, before the start of the crisis). Peacock, released to the general public in mid-July, has quickly become the third-most watched AVOD service, behind the Roku Channel and Tubi.

With many films skipping theatrical release due to COVID, consumer purchase of first-run movies from streaming platforms has jumped significantly. One-fourth of all TV consumers in November said they’d purchased a first-run movie from a streamer, up from fewer than one in five over the summer.

Among those who currently owned a Smart TV, 26% said they purchased their Smart TV during the pandemic — up a full 12 points from July.

“If there were any doubts that some of the changes we’re seeing in leisure habits are here to stay, those doubts were erased when Warner Bros. announced that its entire slate of 2021 films would be released on HBO Max at the same time as theaters,” said Peter Fondulas, principal at Hub and co-author of the study, in a statement. “And with providers like Comcast deciding to impose data caps across its entire footprint as of Jan. 1, it’s clear that many companies agree that streaming content is now the new normal.”

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The hub study surveyed 3,000 U.S. consumers, age 14-74, who watched at least 1 hour of TV per week. The data were collected in October and November 2020.

Hub Study: Online TV Sources ‘Home Base’ for Half of U.S. Consumers

Online TV sources — including subscription video-on-demand services such as Netflix, free services such as Pluto TV, and Virtual MVPDs such as YouTube TV — are now the TV “home base” for half of all U.S. TV consumers, according to Hub’s annual “Decoding the Default” study.

The study since 2015 has tracked the TV source that consumers consider their TV “home base” — the source they turn on first when they’re ready to watch.

“We’ve seen a significant boost in streaming TV service subscriptions since the start of the pandemic in March of this year,” Peter Fondulas, principal at Hub and co-author of the study, said in a statement. “But perhaps more significant than the simple increase in online subscriptions is the profound shift in consumers’ viewing behaviors generally. Instead of reaching first for the cable remote when it comes time to watch TV, more and more consumers are defining TV viewing, first and foremost, as viewing on streaming services. Whether that shift persists once the pandemic crisis has passed is, of course, the billion-dollar question.”

According to the study, 50% of respondents say an online service is the first source they turn on, up from 47% last year. Meanwhile, 42% say their first choice is viewing from the traditional TV set-top box (live viewing, DVR or VOD), down from 47%. (The remaining percentages each year default to viewing over-the-air, from an antenna.)

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For those who default to an online source, nearly half (23% of the 50%) say that online source is Netflix. In fact, Netflix, by itself, is now nearly as likely to be consumers’ TV home base as all live TV channels accessed through pay TV combined. In 2016, live TV from a pay TV service was three times as likely as Netflix to be viewers’ TV default. Netflix trails live viewing by only 7 percentage points.

Fewer than one in five young consumers default to live TV, down 7 percentage points from last year. But more ominously, even among live TV’s strongest adherents — those age 55 or older — the proportion defaulting to live has dropped significantly since just last year. Only 14% of 18-34 year olds turn to live TV before any other source, vs. 21% in 2019. The study found an equal 7-point drop among 55-plus year olds; fewer than half now say live TV is their viewing home base.

The choice of default is driven primarily by two factors — content and ease of show discovery — according to the study. The top reason for making a source one’s default is because it offers access to one’s favorite shows. But a more general content consideration is a top driver as well: wide variety of shows and movies to choose from. Interface simplicity is also a top driver of default, in particular because the service makes it easy to find something to watch.

When consumers decide it’s time to cut back on TV services, they’re much more likely to remain loyal to their TV service default, Hub reports. Hub asked consumers which one TV service they’d keep if they had to drop all others. Among users of each, pay TV service and Netflix were the two most likely to make the cut.

Among users of each service who also treat it as their default, the proportions saying they’d hang on to the service to the bitter end are much higher. For subscribers to the big four SVODs (Netflix, Amazon, Hulu and Disney+), loyalty to the service is two to four times higher among those who default to the service vs. users of each service overall.

Hub’s “Decoding the Default” study was conducted among 1,600 U.S. consumers with broadband, age 16-74, who watch at least one hour of TV per week. The data was collected in August 2020.

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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.

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