Report: 60% of MVPD On-Demand Viewers Report Increase in Use During Pandemic

Six in 10 U.S adult broadband users who use pay-TV on-demand services have increased viewing as a result of COVID-19 stay-at-home directives, with 19% reporting a significant increase, according to new research from The Diffusion Group (TDG).

“Much has been written about recent spikes in the use of on-demand streaming video services such as Netflix and Disney+, and for good reason,” noted Michael Greeson, TDG president and principal analyst, in a statement. “Our findings clearly demonstrate that, being largely confined to their homes, consumers see tremendous value in having access to on-demand shows and movies. And this holds true for all such services, including those offered by pay-TV providers.”

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According to TDG, 77% of adult broadband users that subscribe to a pay-TV service watch shows and movies via the service’s on-demand feature; of those, 60% report spending more time watching on-demand programming as a consequence of having to stay at home due to local, state or national directives related to COVID-19.

TDG also found that:

  • On-demand viewers under the age of 45 were almost twice as likely as those 45 and older to have significantly increased on-demand use (23% vs. 13%, respectively);
  • 21% of those using virtual pay-TV on-demand report significant increases in viewing, a bit higher than their cable and fiber pay-TV counterparts at 19%. Satellite on-demand viewers lag in this respect, with only 13% reporting significant increases;
  • 23% of pay-TV on-demand users in the Western U.S. report a significant increase in use, compared with 19% of those in the Northeast, 18% of those in the South, and 16% of those in the Midwest; and
  • Female pay-TV on-demand viewers were as likely as their male counterparts to have significantly increased on-demand viewing under stay-at-home directives.

 

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In late April 2020, TDG surveyed 1,997 U.S. adults with a broadband data service in the home about their TV and video behaviors. The resulting Quantum Media Behaviors study provides a timely analysis of the pandemic’s impact on media usage, particularly among legacy and virtual pay-TV users, and their counterparts (i.e., Cord Cutters and Nevers). For more information about TDG research, contact info@tdgresearch.com.

Pay-TV Operators Lost Nearly 1.3 Million Subs in Q1

As expected, pay-TV operators lost myriad subscribers in the first quarter (ended March 31) due to ongoing consumer adoption of new home entertainment distribution options, including over-the-top video.

The top-10 pay-TV operators lost nearly a combined 1.3 million subscribers in the period, spearheaded by satellite TV, according to new data from Informitv. That loss is nearly 50% of all subscribers who cancelled service in 2018.

AT&T led all multichannel video program distributors with 544,000 subs lost through its DirecTV (satellite), U-verse and DirecTV Now brands. Dish Network lost 266,000 subs, or 1.2 million in the past 12 months.

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Charter Spectrum lost 152,000 subs, while Comcast lost 107,000. Verizon Fios lost 53,000, while Frontier and Mediacom lost 54,000 and 12,000, respectively. The ongoing industry losses prompted Cox Communications to stop revealing subscriber data.

The top 10 MVPD providers now penetrate about 70% of domestic households with nearly 82 million subscribers.

“They still command a significant number of customers, but the rate of attrition has increased,” Dr. William Cooper, editor of the Informitv, said in a statement.

 

 

Kagan Research Finds Legacy Video Sub Losses Accelerated in Q4 2018

Traditional multichannel video subscription losses swelled in the fourth quarter of 2018, according to research from Kagan, a group within S&P Global Market Intelligence.

Kagan’s fourth-quarter 2018 U.S. Multichannel Subscription Report tallied legacy video subs under 90 million. Combined, the cable, direct broadcast satellite (DBS) and telecom multichannel sectors lost nearly 1.1 million subscriptions in the fourth quarter, which pushed the full-year decline to 4 million, according to the report. DBS services accounted for more than half of the annual loss.

Virtual platforms partially offset the traditional multichannel declines, keeping those customers in a subscription package of live linear channels, but gains to services such as Hulu with Live TV and YouTube TV were not enough to prevent the space from shrinking, according to the report. Traditional and virtual multichannel subscriptions combined fell nearly 1.3 million for the year.

Additional findings in the report were: 

  • The residential penetration rate for virtual and traditional multichannel services ticked down to 75% in the fourth quarter of 2018.
  • Multiple-system operators (MSOs) wrapped up 2018 with another round of quarterly losses, bringing the platform’s annual decline to nearly 1.3 million, versus a drop of 997,000 in 2017.
  • Telco video services cut combined annual subscriber losses for a second consecutive year, losing 351,000 subs to end 2018 at 10.3 million.
  • DirecTV and Dish each lost more than 1 million subs in 2018.

Digital Hollywood Panelists Ponder Future of Skinny Bundles, Digital Delivery

Skinny bundles and virtual MVPDs are an imperfect solution to the desire of consumers to get the content they want at the price they want, while an a la carte online delivery system that perfectly satisfies consumers’ desires has yet to be fully realized.

That was the consensus of panelists at the “Internet TV Packages” panel at the Digital Hollywood conference Oct. 18 in Los Angeles.

“The consumer cares about two things, value and choice,” noted panelist Thomas K. Arnold, publisher of Media Play News. While choice has expanded over the years from only a few networks to an array of cable channels to videocassettes and discs and digital delivery, finding content is getting more complicated.

“The important thing here is curation. The old manual curation by networks is going away,” said panelist and consultant Robin Wilson, director, RW TV. He said the future is one in which consumers can “self-curate” content or in which curation is automated.

While some pundits say only younger consumers are peeling away from traditional viewing, even Baby Boomers, still working and facing a time crunch, are also moving away from appointment TV, said panelist Josette Bonte, managing director, Digital Content Strategies.

“There is definitely a problem to be solved by the industry,” she said. “I would like to have my own skinny bundle.”

“Current skinny bundles are just a patch up job,” Wilson added.

“It’s the same problem that’s always been the problem,” Arnold noted. “These internet services, they’re great for service, but bad for discovery.”

Consumers who are watching subscription services have a hard time breaking out of that silo, Arnold said.

“Your likely going to stay on Netflix or Amazon after watching a show,” he said.

To truly curate your own content can be difficult, he said, noting that his family had to “piece together our own skinny bundle” from offerings on Netflix, Amazon and Hulu to watch an entire series of a show they loved.

He predicted that consumers in the future would be paying more for entertainment but in smaller increments, comparing it to gym memberships that have retained consumers by offering ultra-low prices.

“At $10 a month, people are going to get them all [even niche OTT subscription offerings],” he said. “At $10 a month you’re not going to really notice it.”

Bonte said niche SVOD services “definitely have the chance to complement the bundles.”

Technology — perhaps from Google, Amazon or Roku — will overcome the difficulties of getting to different apps and online services to get content, panelists said.

“The idea of switching from HDMI 1 to HDMI 2 will be as archaic as rewinding the videocassette,” Arnold said.

Device integration with artificial intelligence will also assist in content discovery, Bonte said.

Panelists also pondered the growing competition in the SVOD market led by Netflix, Amazon and Hulu, soon to be joined by Disney and WarnerMedia — and the data from SVOD services that is informing what content consumers are fed.

Netflix is “definitely good at use of data” to determine content, Bonte noted. It’s an advantage for the company, Wilson added.

Netflix knows a lot about what consumers are watching, but “they won’t tell us,” Arnold said, adding that research company Parrot Analytics is using social media and other measurements to try to estimate the popularity of SVOD original programs.

One audience member noted that Netflix’s recommendation engine is less than perfect, causing her frustration as it served up the same type of content over and over.

Data targeting with ads, too, needs improving, Wilson noted. The ads served up should be more efficient, “not bombarding” the consumer.

One audience member noted that Rotten Tomatoes, which calculates content ratings based on human reviewers, is one of the most popular content recommendation sites online.

Newfangled content delivery technologies have a way to go, Arnold noted. “People who talk about artificial intelligence forget that first word, artificial,” he said.

Speaking at Digital Hollywood on Oct. 18 were, from left, moderator Patrick Redmond; Media Play News publisher and editorial director Thomas K. Arnold; and consultants Josette Bonte and Robin Wilson.

Research Shows Broadcast Networks Still Highly Desired by Consumers

Despite declines in viewing, broadcast networks top the list for most desired channel groups, according to research from The Diffusion Group.

Diffusion’s national study, Video Viewing Behavior in the Age of Quantum Video, examines preferred network groups by demographics and video behavior. The firm surveyed 2,030 connected consumers as to the five network families they’d prefer to have included in a five-group skinny TV plan. (Respondents were able to see which channels were included in each network group before selecting.) The big four broadcast network groups occupied four of the top five spots, led by NBC Universal (selected by 48%), followed by Fox (41%), Disney/ABC (41%) and CBS (38%).

“Live big-four broadcast viewing is diminishing, as with virtually every major network. This should not imply, however, that their death as brands or as major forces in consumer video is inevitable,” said Michael Greeson, Diffusion’s director of research, in a statement. “The value of their content is immense — top of mind for many viewers.”

The rankings offer important insight into the viability of direct-to-consumer services, according to Diffusion. For example, the fact that the ESPN family failed to rank in the top 10 suggests Disney’s decision to make ESPN Plus a premium add-on to its linear ESPN channel may have been a wise move, the research group noted.

“Many expected ESPN Plus to be the online equivalent of ESPN, but Disney decided that the risk of cannibalizing high-value linear pay-TV subscriptions would create substantial channel conflict and hasten the declines in pay-TV subscriptions,” Greeson stated. “This risk is inherent in the DTC model and must be addressed group by group, even channel by channel.”

For example, though ESPN Plus may be best positioned as a value-add to its live linear pay-TV service, Disney’s family-focused direct-to-consumer service appears destined to follow in the footsteps of CBS All Access – that is, serve as a full-on replacement to its linear channel, with a growing number of high-value titles reserved for the new service, according to Diffusion.

The standings also offer important insight into the viability of a new virtual MVPD entrant, Philo, which is populated by the channels A&E, AMC, Discovery and Viacom, the research firm noted.

“While this may at first glance seem too specialized to gain mass appeal separate from a broadcast bundle, the combination of networks may prove attractive,” according to a Diffusion release. “Keep in mind that A&E was selected as top-five by 37% of connected consumers, AMC by 28%, Viacom by 24% and Scripps by 21%.”