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.”

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: 36% of U.S. Broadband Homes Subscribe/Trial Video Game Service

Video games continue to resonate among U.S. consumers. New research from Parks Associates finds 75% of domestic broadband households play video games for at least one hour per week, and 36% subscribe to or are trialing at least one free or paid gaming service. The Dallas-based firm forecasts the U.S. cloud-based gaming reaching $3.6 billion in 2024.

“While nearly two-thirds of households are not yet engaged with any gaming services, cloud gaming can become a staple within the subscription entertainment options available to consumers,” senior analyst Paul Erickson said in a statement.

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Erickson said Netflix’s entry into online video games up attention on the budding market and broadens the potential consumer base.

Parks also found that 91% of console gamers play games on at least one other platform, with 37% playing on a PC, mobile device, and a connected TV device (either a smart TV or streaming media player) in addition to their console.

“Console owners who also play on a mobile device and a PC or who play on every platform category make up half of all console gamers. Simply put, console gamers are multiplatform gamers,” Erickson said. “Subscription and cloud gaming services require a multiplatform approach so that providers can appeal to both dedicated gamers and the remaining market of casual or convenience gamers.”

The analyst contends the growing popularity of online gaming, driven in part by the pandemic, will have ripple effects throughout the connected home ecosystem, driving broadband upgrades, improvements in home networking and Wi-Fi management, and more subscription stacking.

Parks: Cord-Cutters Spending $85 Monthly on OTT Video Services

New research from Parks Associates finds cord-cutters are spending $85 per month on average for their online pay-TV or standalone subscription-based services, roughly $30 less than what they were paying for traditional pay-TV service.

The Dallas-based research firm’s Quantified Consumer: Cutters, Nevers, and the Rebundling of Video, examines consumer trends in unbundling video services and the recent phenomena of consumers re-bundling their service portfolio because of a fragmented video content marketplace.

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“Cost concerns drove many consumers away from traditional pay-TV, and OTT services are delivering on the promise that they can offer desired video content at a considerably lower price point,” Elizabeth Parks, president of Parks Associates, said in a statement.

Parks said the data revealed that 47% of cord-cutters subscribe to four or more OTT services.

“In order to have an optimal video portfolio, they are creating their own video bundles by stacking OTT services,” she said.

Cord-cutters currently spend nearly twice as much monthly on OTT services as cord-nevers. There are more than 6 million cord-nevers, U.S. broadband households that have never subscribed to traditional TV, and are also less likely to own key streaming video products such as smart TVs and streaming media players.

By contrast, 58% of cord-cutters own a smart TV, which is roughly equivalent to the national average, so cord-cutters demonstrate an affinity to video content and services that make them a valuable segment for providers to target, according to Parks.

“As they migrate away from traditional pay-TV, cord-cutters seek service offerings that more closely meet their video content needs with the added value of flexibility at a lower cost,” Parks said. “OTT services have to continually deliver flexibility and customization at a reasonable cost to keep these subscribers engaged and retain them on an ongoing basis.”

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

Parks Associates disclosed that 82% of U.S. broadband households subscribe to at least one OTT service, up six points year-over-year, while 58% subscribe to a traditional pay-TV service, down four points year-over-year.

“The steady rise in online pay-TV adoption has made up for some of the significant drops in traditional pay-TV,” Steve Nason, research director for Parks Associates, said in a statement. “Video consumers are looking to online pay-TV services to offer a similar viewing experience and content offering at a lower price point. However, online providers, who don’t typically generate content on their own, have had trouble stabilizing subscriber costs as content fees continue to rise.”

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Dallas-based Parks reports that 25% of domestic broadband households subscribe to a TV service offering a bundle of live channels via an online provider, including 13% who have both traditional and online pay-TV services. Adoption of online TV increased four percentage points to 18% in Q1 2021. As cord-cutters or cord-nevers look for a more live/linear video viewing experience online, online  service uptake has picked up.

“The COVID-19 pandemic accelerated many existing trends in the video services market,” Nason said. “Moving forward, consumer preferences will continue to shift online as video viewers perceive these services to be less costly, more convenient, and more aligned with how they want to consume video programming.”

Parks: U.S. Pay-TV Industry Lost More Than 18 Million Subscribers From 2014 to 2020

The U.S. pay-TV and high-speed internet markets keep going in opposite directions.

Cable keeps losing viewers, while the streaming business continues to see gains.

New data from Parks Associates estimates that from 2014 to 2020, domestic pay-TV providers lost more than 18 million subscribers, while the broadband market exploded, with 40% of broadband households receiving a standalone service. In 2020, more than 7 million households dropped their pay-TV services. Traditional pay TV — television services delivered over an operator-controlled network to an operator-controlled device — declined by an estimated 10 million subs.

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“Online pay-TV service from virtual MVPDs, players that target the general population instead of offering services to a specific geographic footprint, grew by an estimated three million,” senior analyst Kristen Hanich said in a statement. “[Online TV] overall [has] grown to represent an increasingly large percentage of the pay-TV market — accounting for 16% of subs in 2020.”

In the domestic market, online TV represented the only segment of the pay-TV space to experience growth during the COVID-19 pandemic. Dallas-based Parks estimates that by the year 2024, the traditional pay-TV sub base will decline to just 53 million households — while online TV will increase to more than 23 million.

Internet service providers and others operating in the pay-TV space are thus seeking alternatives to traditional pay-TV in their consumer services arsenal. Cable operators have had some success in encouraging new bundling by launching Wi-Fi-first mobile virtual network operator (MVNO) services, primarily running on Verizon’s network. In the research company’s Q1 2021 survey, 4% of broadband households reported subscribing to Comcast Xfinity Mobile, Spectrum Mobile or Altice Mobile — making them some of the largest players in the MVNO space.

“U.S. ISPs collectively have over 110 million residential and small business internet subscriptions as of Q1 2021,” Hanich said. “The standalone broadband market will continue to grow, increasing pressure on these service providers to find the next combination of services that best leverages this massive subscriber base.”

Parks: Apartment Residents Want Broadband Included in Rent

With increased dependency on high-speed internet service, new data from Parks Associates finds that 40% of survey U.S. respondents who live in multi-dwelling apartments (MDU) are interested in bulk broadband internet bundled with their rent — and 77% of those are willing to pay higher rent in exchange for these services.

Dallas-based Parks firm also tracked growing ownership in smart home devices among MDU residents, with 41% of all broadband households owning at least one smart home device, compared with 34% of single-family households.

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“Consumers need broadband to live, work, learn, shop, and connect to healthcare, banking and more,” Jennifer Kent, VP of research at Parks Associates, said in a statement. “Social distancing during the COVID-19 pandemic has revealed consumer dependence on reliable connectivity and high-speed access, as it is the foundation for access to and quality of connected services like telehealth, video conferencing, and online fitness solutions to meet their daily needs.”

High smart home device adoption among MDU residents correlates with age. Consumers 25 to 34 years old are among those more likely to adopt smart home devices, and they are also the most likely to live in a multi-dwelling unit.

Building on a high-performing broadband backbone, Parks suggests MDU property managers can leverage connected devices and smart platforms that integrate connected solutions to streamline property management tasks and lower operating costs, attract and retain residents, and increase rental revenues. Sixty-five percent of MDU builders report their business model leverages smart home technology to differentiate properties and add value.

“Today’s homes are dependent on technology and connectivity, and this requires a strong need for consultative engagement for MDU developers and managers,” said Vickie Rodgers, VP of Cox Communities. “From optimizing operational efficiencies, connectivity solutions, cloud-based services, device choices and integration, smart homes don’t work without great broadband connections and the appropriate integration.”

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: 46% of U.S. Broadband Households Subscribe to Four or More OTT Video Services

With a slew of new and re-imagined streaming video services on the market in the past year, high-speed internet households are embracing the choices.

New data from Parks Associates’ Q1 2021 survey of 10,000 broadband households found that 46% of respondents subscribe to four or more OTT services, and 82% of respondents have at least one SVOD subscription, compared with 76% in Q1 2020.

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“New services are employing a variety of growth strategies, including external partnerships to expand their reach and market footprint and augmentations to their offerings to grow share and increase retention,” Elizabeth Parks, president of Parks Associates, said in a statement.

“With OTT adoption so high, providers are exploring new strategies, including expanded IP and AI-powered enhancements, to stay competitive,” added research director Steve Nason.