U.S. Broadband Homes Without Pay-TV Projected to Hit 58 Million by 2025

The cord-cutting continues. New reported data from TDG Research contends the number of U.S. households with high-speed internet and without pay-TV service will reach 54 million by 2025. The tally was 38 million homes in 2020.

The projection underscores ongoing trends among major pay-TV operators such as Comcast, AT&T and Verizon, which have seen their broadband subscriptions skyrocket while linear TV subs plummet. Broadband is the lifeline distributing over-the-top video into homes.

Beginning in 2010, just 8% of high-speed internet subs had jettisoned pay-TV. That percentage doubled in 2015, reaching 35% in 2020. A majority of domestic broadband homes with pay-TV is expected by 2026.

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“A decade ago, the [broadband only] segment was comprised almost exclusively of bleeding-edge adopters; those defined by a fascination with new products and services and a pocketbook to fund their experiments,” senior analyst Paul Hockenbury said in a statement. “Today, the BBO segment is largely defined by early-mainstream dispositions: buying only when the price has come down, the technology has peer-demonstrated benefits, and plenty of support is available.”

Interestingly, broadband homes without pay-TV still consume a lot of small screen entertainment — reportedly just 10% less than the 31 hours consumed weekly by pay-TV households.

Among cord cutters, about 60% of TV viewing is done via streaming video, which is 50% more than broadband homes with pay-TV. Not surprisingly, Netflix, Amazon Prime Video and Hulu are the top-streamed services among BBO households, with Hulu 10% more popular than high-speed internet homes with pay-TV.

About 66% of broadband-only homes stream AVOD content, with 76% opting for YouTube compared with 36% for Pluto TV. More than 33% of  BBO homes also use a digital TV antenna, consuming 12 hours of content weekly.

Donald Trump Launching Social Media, SVOD Network

Former President Donald Trump is seeking to launch a social media platform and subscription VOD service following the merger of his Trump Media & Technology Group with Miami-based Digital World Acquisition.

The former president was banned from social media platforms Facebook, Twitter, Instagram, SnapChat and YouTube following the Jan. 6 U.S. Capitol insurrection by his supporters.

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In a statement, Trump said TMTG’s “Truth Social”platform and TMTG+ SVOD service would create a rival to the “liberal media consortium” and fight back against the big tech companies with “non-woke” entertainment programming, news and podcasts.

The company has hired TV producer Scott St. John to run TMTG+ operations. St. John is the executive producer of “Deal or No Deal’ and “America’s Got Talent,” among others.

“We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced,” Trump said. “This is unacceptable.”

Trump thinks his new platform can eventually compete with Amazon Web Services, Google Cloud, Netflix and Disney+. Truth Social is set to beta launch next month, with a full rollout set for the first quarter 2022.

In a consumer survey on the political website The Hill, 30% of respondents said they would frequent Trump’s online initiatives, while 54% said they would not, and 16% said they would consider it.

Parks: 39% of Streamers Access Services Based on Specific Content

New consumer data from Parks Associates reveals that 39% of streaming video viewers access platforms based on specific content available. In partnership with Conviva, Dallas-based Parks is presenting its latest research during the industry webinar “The Role of Content Discovery in OTT” on Oct. 14 at 10 a.m. CT (11 a.m. ET). The webinar explores content discovery strategies that companies are using as a key differentiation factor in attracting new subscribers and keeping users engaged.

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“Content is key to OTT success, and the path for consumers today to get to that content is the crucial search and discovery process,” senior analyst Paul Erickson said in a statement. “OTT players are successful when offering a premium, personalized user experience that allows subscribers to find and access relevant content based on their habits and preferences. A perceptive and intelligent content discovery strategy is a key differentiator in attracting and engaging subscribers over the long term.”

Parks found that three out of the top five factors that drive streaming subscriptions involve content and that the inability to find relevant content is a top reason for consumers leaving a service.

“With so many entertainment options at viewers’ fingertips, it is more important than ever before for streaming publishers to understand how consumers discover content in order to win their engagement,” said Nick Cicero, VP of strategy at Conviva.

Kagan: Cord-Cutting to Cost U.S. Pay-TV Biz $33.6 Billion in Annual Revenue by 2025

Cord-cutting among pay-TV subscribers is no longer a niche activity. The practice of giving up the traditional cable/satellite/telecom channel bundle for over-the-top video is now expected to strip nearly $33.6 billion in annual revenue from U.S. operators through 2025, according to new data from Kagan.

The research firm contends revenue from cable, satellite and telecoms will decline from $91.1 billion in 2021 to $64.7 billion by 2025 as subscribers jettison service for alternatives such as Netflix, Amazon Prime Video, Disney+, Hulu, Peacock, Paramount+ and HBO Max, among others.

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The changing viewing patterns, only slightly moderated by rising average revenue per unit, are forecast to depress sales, excluding advertising, by 45% from the 2016 peak of more than $116.9 billion.

“While all three major platforms are feeling the impact from the shift, the magnitude of the losses are expected to hit more acutely for satellite (i.e. Dish and Direct Stream) and telco (Verizon, AT&T) revenue subtotals amid waning commitments by major players and relative stability from the large cable providers such as Comcast and Charter,” Kagan wrote in a post.

Parks: Video Streamers Love Broader Content Offerings

The proliferation of over-the-top video services caters to niche audiences, correct? Not so much.

New survey data from Parks Associates finds that U.S. broadband households, who despite favoring at least one particular type of content genre, spend 70% of their streaming time on average on services with a broad variety of content, such as Netflix, Tubi or AMC+. Specifically, 44% of 5,000 respondents spend 76% or more of their streaming time on broad-based services, while 48% spend 25% or less on niche services.

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“Services offering a variety of content categories are the foundation of consumers’ video service ensembles,” senior analyst Paul Erickson said in a statement.

Erickson contends that despite niche services such as Shudder, Britbox and Crunchyroll dedicated to horror, British, and anime content, general entertainment platforms rule the conversation.

“[Niche services] are unlikely to be the primary, foundational content source within a household,” he said.

Ad-based services in particular have broadened their market appeal over the past few years by incorporating different genre categories. Crackle has made significant additions to its nonfiction content, Pluto TV has added several sports channels, and Tubi TV highlights children’s programming with its “Tubi Kids” section, according to Parks.

“If services are to challenge Netflix, Amazon Prime Video and Hulu, they need to feature a variety of programming across genres,” Erickson said. “We will see more bundling services emerge like AMC, which bundled together its niche services Shudder, Sundance Now, and IFC Films under the AMC+ service umbrella in order to give viewers more options.”

The research also finds that while “content is king,” cost is still the leading factor when consumers choose an OTT service. Fifty percent of respondents cite service cost as a key determination in the services that they use to access online video content. In response, key services have experimented with diversified pricing options. Disney+ has introduced transactional purchases, while Peacock is incorporating an AVOD option, and HBO Max and Paramount+ offer less-expensive ad-supported tiers.

“A hybrid pricing approach meets consumers where they are,” Erickson said. “Maximizing revenue potential with hybrid pricing will help services finance the growing cost of content library growth.”

Parks: More Than 50% of Households Combine Netflix, Amazon Prime Video or Hulu With Fourth OTT Video Service

New consumer data from Parks Associates finds that 54% of U.S. broadband households combine Netflix, Amazon Prime Video or Hulu with at least one other subscription video service.

Currently, 82% of U.S. broadband households subscribe to an OTT service, and OTT service stacking has grown exponentially as new services such as Paramount+ launch, according to the Dallas-based research firm. As cord-cutters migrate away from traditional pay-TV, they increasingly seek video service offerings that more closely meet their content needs, with the added value of lower cost and flexible use cases.

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Parks notes that cord cutters used to spend $117 per month on pay-TV services and are now paying $85 per month for OTT video services.

“Subscription fatigue and ad intolerance are pervasive in the streaming industry, and consumers are becoming more selective about where they spend their time and money,” said Lexie Knauer, senior product marketing manager at Brightcove, which contributed to the report. “It’s important for streaming services to go to market with a strong acquisition strategy to clearly promote the value of their content across the right channels and ultimately capture their target audience.”

Michael Ribero, chief subscription officer with The Washington Post, said increased SVOD service stacking underscores the fact that no one service satisfy all consumers.

“I think this [data] helps services with a clear identity, while others will need to clarify how they fit into the customer’s bundle,” Ribero said. “And I believe this has downstream ramifications especially for discovering new shows and content.”

Data: Southeast Asian Online Video Revenue to Reach $4.5 Billion by 2025

Over-the-top video distribution in Southeast Asia continues to proliferate. Total online video market revenue in the region projected to rise to $4.5 billion by the end of 2025, according to new data from London-based research firm Omdia. By 2025, it is forecast that 62% revenue will come from ad-supported VOD and free ad-supported streaming television, or FAST.

Last year, total online video revenue in key Southeast Asia markets, including Indonesia, Malaysia, the Philippines, Singapore, Vietnam and Thailand, reached $1.8 billion.

In 2020, the ad-supported segment led the online video with 71% of total revenue. Omdia projects that the subscription-based online video will increase market share from 28% to 37% of total online video revenue through 2025. Transactional VOD makes up less than 1% of total market share.

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With Facebook and YouTube’s popularity in this region is unilateral, this duopoly will remain the biggest contributors to ad-supported video revenue. Omdia estimates 75% of video ad revenue comes from mobile devices and 20% from PCs. Though only 5% is from connected TVs, Omdia expects the CTV segment to grow during the forecast period, albeit at a slower pace than in the U.S. and Western European markets.

“This [revenue growth ] trend is bolstered by more direct-to-consumer OTT video service launches in this region, broadcasters’ ongoing efforts to strengthen their position in the premium video ad marketplace and growth of local and regional players as a result of more enhanced partnerships between content and service providers,” Kia Ling Teoh, senior research analyst at Omdia, said in a statement.

Fellow researcher Jun Wen Woo contends the subscription VOD market will continue to grow with pay-TV and telecom operators adopting more of an hybrid streaming/broadcast business model. He said as increased competition introduces flexible, modular tariff structures that allow users to personalize and customize their online video entertainment selections, revenue will grow.

“Given the low credit card penetration in the region, offering more local payment options—mobile wallet, scratch card, and local bank transfer—will remain important to increase conversion to paid users,” Wen Woo said.

Parks: U.S. Streaming Video Subscriptions to Reach 277 Million by 2026

Parks Associates Aug. 24 announced that the number of over-the-top video subscriptions in the U.S. will increase from nearly 230 million in 2021 to more than 277 million in 2026, an increase of more than 20% in five years.

Citing internal research, Dallas-based Parks said that 80% of millennials and Gen-Z survey respondents said they stream video on more than one platform at least monthly.

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Parks said that in Q1 2021, the average OTT subscription in domestic broadband households was roughly 2.5 years and had a strong correlation with age. Subscription lengths for younger consumers are much shorter than for older consumers. Older consumers subscribe to fewer services, but keep them for a longer period. By contrast, younger consumers may subscribe to a larger number of services but are more likely to churn through them.

“The delivery and digestion of streamed content market is heavily influenced by the ability to attract and retain viewers,” David Palmer, president of Everise, which contributed to the report, said in a statement.

Palmer said media companies should consider a myriad of preferences and consumer behaviors, including age, viewing habits, interests, available time and platform preference, among others.

“The emergence of multiplatform viewing further drives the need for these brands to protect both themselves and their customers with a multichannel content moderation and omnichannel support strategy,” said Palmer.

Competitiveness between OTT video and other forms of entertainment will continue to increase with a larger share of consumers’ time going toward socialization, in-person, recreation, vacation and events, according to Parks.

“Brands can leverage new engagement data to help design new services and improve their customer support and retention strategies, offering value to consumers both at-home on different platforms and on-the-go,” added Parks senior analyst Kristen Hanich.

Parks: Netflix, Amazon, Hulu Dominate OTT Video Subscription Lengths

Sometimes it helps to be an industry disruptor, other times brand awareness carries the day.

Both apply to Netflix, Amazon Prime Video and Hulu, which rank as the top three subscription streaming video services when it comes to length of the typical subscription. New data from Parks Research found SVOD pioneer Netflix rates No. 1 with the average subscriber duration lasting about 48 months. That compared with 40 months for Prime Video and 30 months for Hulu.

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The Dallas-based research firm found that 61% of OTT subscribers never join a service on impulse, and 50% never subscribe with plans to cancel shortly thereafter. With services like Netflix and Disney+ dropping free trials, subscribers look for SVOD plans for a long-term investment, according to Parks. For SVODs, this means content must be appealing enough to generate and sustain that interest. Indeed, about 30% of subs often join a service to watch a specific program. As a result, the search for desirable content holds the greatest importance, according to Parks.

Not only does desirable content and personalities prompt retention, but viewers are unlikely to churn from a service that they have a strong brand affinity for.

So when WarnerMedia launched HBO Max last year, the initial goal was to broaden the lineup of traditional edgy HBO shows with other marquee IP, including DC Entertainment and Max originals. The strategy mindset being that targeting a wide variety of interest groups would unify niche audiences under one streaming service.

Paramount+ has emulated this strategy, featuring its key properties and personalities heavily within the marketing that promises a “mountain of entertainment.” Disney, Pixar, Marvel, Lucasfilm, and National Geographic feature prominently on Disney+ as their streaming home, allowing the upstart SVOD to rapidly gain subscribers globally and become a contender to Netflix & Co.

Parks researcher Liam Gaughan found that upstart SVOD services being bundled together with competing and non-competing services have been successful at generating subscribers. In addition to the “Disney Bundle,” offering new subs access to Disney+, ESPN+ and Hulu for $13.99 monthly with ads ($19.99 without), Gaughan cited a previous bundling deal offering Apple TV+, CBS All-Access, and Showtime for $9.99. He said that content from Showtime and All Access enabled Apple users to try alternative programming and helped extend subscriptions.

“This was also a strategic move from ViacomCBS, who was able to introduce All-Access content to Apple users prior to the launch of the rebranded Paramount+,” Gaughan wrote in a blog post.

Parks: 82% of U.S. Broadband Homes Have at Least One SVOD Service

Parks Associates’ latest research of 10,000 U.S. broadband households found 82% of homes have at least one over-the-top video service subscription, up from 76% in the first quarter of 2020.

“With OTT adoption so high, providers are exploring new strategies, including expanded IP and AI-powered enhancements, to stay competitive,” Steve Nason, research director of Parks Associates, said in a statement.

Parks is holding two virtual sessions as part of its fourth annual Future of Video: OTT, Pay TV, and Digital Media series June 9 to explore customer adoption and churn, strategies for maintaining and retaining subscribers, and best practices in data-driven decision-making for OTT services.

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“Service stacking is trending up, with 46% of U.S. broadband households subscribing to four or more OTT services,” Matt Smith, VP of business development at Symphony MediaAI, said in a statement. “Forward-looking OTT providers are wondering when, not if, the tipping point will come — and they’re turning to predictive AI and other technology to prepare. We look forward to discussing the most effective strategies to mitigate the subscriber churn challenges that the OTT market will inevitably continue to face as consumer behaviors evolve.”

To Scott Handcock, VP of marketing at Plex, preventing churn remains one of the industry’s core challenges.

“Making it easy for consumers to find exactly what they want that speaks to their unique interests [is key],” Handcock said. “Whether it’s a series from a subscription service, live TV, a movie or show for rent or purchase, or ad-supported content, if we can make it an intuitive, personalized, and enjoyable experience, why wouldn’t they stick around?”