Parks: Mobile Viewing Accounts for 40% of all Video Consumption Among Gen Z Households

Viewing on a smartphone or tablet now accounts for over 40% of all video consumption hours among Gen Z heads of U.S. broadband households, compared to just 20% among all heads of domestic broadband households, according to new data from Parks Associates.

The Dallas-based research firm found Americans overall view more video on TVs than on PCs, and PCs more than mobile devices. However, device preference is strongly generational, and both millennials and Gen Z do most of their viewing on devices other than TVs.

 

“Since the introduction of the PC, and later smartphones and tablets, consumers’ viewing habits have evolved to include these new device types alongside the television,” analyst Kristen Hanich said in a statement. “These devices have become increasingly important to consumers, with mobile devices and PCs together capturing roughly half of consumer-reported viewing time. Companies in the entertainment space, particularly those targeting members of Generation Z, must make mobile and PCs part of their plans.”

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Jodi Susman, CMO, Penthera, a software development company that worked with Parks on the study, said the data suggests Gen Z’s high affinity for mobile video means its role is going to continue growing in the upcoming years.

“There’s also an important lesson here for the industry: It’s crucial to ensure a seamless experience on all platforms,” Susman said.

The report found that among Gen Z, the demo dedicates the largest share of its viewing time to mobile devices, then PCs, with the TV having the smallest share. Among millennials, while the TV has the higher share of viewing than PCs and mobile independently, collectively the two platforms account for almost two-thirds of viewing time.

“In 2020, Americans as a whole are largely multiscreen,” Hanich said. “Almost two-thirds of consumers view on multiple devices, including their mobile device, a TV, or a PC. Multiplatform viewing is highest among members of Gen Z, signifying that these viewers demand equal support for mobile, PCs, and TVs.”

Parks: 300 OTT Video Services in U.S.

Over-the-top video distribution continues to proliferate nationwide. New data from Parks Associates suggests the number of OTT video services has more than doubled in the past six years to 300 platforms through the third quarter (ended Sept. 30).

Steve Nason, research director at Dallas-based Parks, said the coronavirus-related shutdown of movie theaters, and studios delaying the release of major titles to next year, accelerated OTT video adoption among consumers.

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“The decision to delay the latest James Bond film No Time to Die hit the theater industry hard, and Disney’s announcement to move the Pixar film Soul to Disney+ shows studios are putting more emphasis on streaming,” Nason said in a statement.

The analyst contends that with studios also owning digital distribution, increased experimentation with transactional VOD and theatrical windowing is on the agenda. Nason called the recent partnership between NBCUniversal and Roku to distribute new streaming service Peacock as a “win-win” for both parties.

“Through this partnership, NBCUniversal gets its new marquee OTT service on one of the leading streaming video platforms, and Roku gets a significant incremental revenue bump from Peacock’s advertising, no matter the split,” Nason said. “The agreement will yield large gains of users and paying subscribers for Peacock as it takes on the Big 3 [Netflix, Hulu and Amazon Prime Video] in OTT and newer entrants from Disney, Apple, WarnerMedia, and ViacomCBS.”

Parks: 62% of Broadband Homes Still Have Pay-TV

Despite finding high-speed Internet service in almost every home, with weekly video consumption up more than 37 hours per household, new data from Parks Associates contends 62% of U.S. broadband households still subscribe to a traditional pay-TV service, down from 69% in Q1 2019.

“The explosion of online viewing options and video consumption came at the same time many shelter-in-place orders were enacted,” research director Steve Nason said in a statement.

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Nason said as households rely more on OTT services, the spike in online video consumption and decrease in linear-only households, the gap between OTT and traditional pay-TV is widening.

“Traditional services are looking to migrate to the cloud to get the best of pay-TV and OTT,” he said.

Nuno Sanches, GM, media & telecom at New York-based software company Kaltura, said the paradigm shift in the pay-TV consumption underscores the benefits of putting cloud-based TV at the heart of the ecosystem. He says cloud TV combines the agility, speed, and multiscreen usability of OTT, with the reliability, robustness and scale of pay-TV.

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“Just five years ago it was considered impossible to deliver operator-grade service from the cloud,” Sanches said. “The economics was perceived to be too expensive, and it seemed that telecom operators would not accept the perceived loss of control involved in utilizing the open Internet to deliver pay-TV services. But today, we have multinational pay-TV operators embracing online TV.”

Parks: 30% of Broadband Users Prefer Home Entertainment Over Large Group Events

Re-opening of movie theaters and live sports events may not have that “build it and they will come” happy Hollywood ending. New data from Parks Associates finds 30% of domestic broadband households intend to avoid public events and large gatherings of people into 2021, due to concerns of exposure to the coronavirus.

Dallas-based Parks is tracking the impact of the pandemic on consumer behaviors, attitudes, and intentions in the consumer and home technology markets through multiple research projects, including the series “COVID-19: Impact on Consumer Behavior and Spending.”

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Parks contends consumers have cut discretionary spending by 50%, although consumer electronics and computer purchases have increased for the first time since 2011 due to increased numbers of people working from home.

“Seventy percent of U.S. broadband households believe the economy will need a long time to recover from the COVID-19 pandemic, and only 23% believe the economy will rebound quickly once social-distancing measures are lifted,” David Drury, research director of Parks Associates, said in a statement. “With record-level unemployment and continuing uncertainty about the future … changes in consumer behavior will not reverse in the near term, with 29% delaying vacations or personal travel till at least 2021.”

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While consumers are hesitant about spending, one area with solid purchase intentions is consumer electronics and the increased consumption of video at home. During the COVID-19 crisis, 26% of U.S. broadband households purchased electronics. Parks predicts that with an ongoing global pandemic, and worsening conditions in the United States, strong demand for technology products and services will continue into 2021 and potentially even 2022, including high broadband usage at home to deliver messaging, video calling, and virtual meeting applications; video game downloads; and streaming video services.

Currently, 74% of U.S. broadband households subscribe to at least one streaming video service, and almost half of U.S. broadband households subscribe to two or more.

Parks: U.S. Online Video Game Market to Generate Nearly $3 Billion in Annual Subscription Revenue

Online video games are growing in popularity, especially among multi-player formats. New research from Parks Associates finds the U.S. cloud gaming market could generate nearly $3 billion in annual subscription revenue, as 30% of domestic broadband households currently express interest in this service.

Dallas-based Parks reports 74% of U.S. broadband households play video games for at least one hour per week. Gamers play for an average of 22 hours per week, a number skewed towards heavy gamers, and PC gaming shows the biggest gains as a result of COVID-19 pandemic.

“There is a renewed interest in offering cloud gaming services that replicate Netflix’s value proposition by allowing consumers to stream games over the internet, across multiple platforms, and without having to download files or use local processing power,” senior analyst Kristen Hanich said in a statement.

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Hanich estimate the cloud-based gaming market could generate more revenue via service stacking and add-on sales as multiplatform gamers are the key consumer segment to target for initial rollouts.

The research also notes the average number of hours played per week has increased since the COVID-19 outbreak. PC gaming in particular saw a large increase in the number of hours played weekly, while gaming consoles were the only platform to show a decline in usage among heads of household from Q3 2019 to Q1 2020.

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“Cloud gaming services enable providers to leverage this increased gaming on connected devices, including smart TVs and streaming media players, where gaming is often secondary to their main value proposition, Hanich said. “The continued improvement of Internet networks and the cloud, as well as the rollout of 5G with its promises of improved latency, enables companies to offer high-performance cloud gaming solutions across multiple platforms without taxing their limited processing power.”

Parks: 90% of Households With Children at Home Subscribe to at Least One OTT Service

Have children living in the home? There’s a good chance you subscribe to an over-the-top video streaming service. New consumer research from Parks Associates finds households with children, particularly those ages 6 to 11, are the leading demographic groups for technology product and entertainment service purchasing. The survey finds 90% of households with children at home subscribe to at least one OTT service.

“New content offerings for OTT services that highlight children’s content or educational content will help keep this group engaged, especially as we continue to see some states encouraging or mandating consumers to stay at home [due to the coronavirus],” Jennifer Kent, senior director of Parks, said in a statement.

Parks found that 38% of participants in a survey of U.S. broadband households with children plan to buy a smart video doorbell over the next 12 months, compared with 14% of households without children.

Kent said about 30% of broadband households have children in the home translates to 32 million households. She said these households are young enough to be receptive to smart-home technology but old enough to have the income and educational levels associated with smart-home adoption.

“They self-identify as ‘innovators’ (i.e., they like to purchase a new product early in its lifecycle) at more than twice the rate of broadband households,” Kent said. “Combining this strong technology affinity with the need to buy products for their children creates a powerful tech-buying segment.”

With COVID-19 infections continuing to wreak havoc on the economy and society, so too could the pandemic undermine consumer electronics consumption going forward.

Parks found that 50% of respondents worry about their financial stability, and 61% are more cost-conscious because of the coronavirus.

“It is important for the device makers and service providers to emphasize the essential value in their solution, such as safety and security, although entertainment is also critically important for households with children,” Kent said.

Parks: Consumers Spend Seven Hours Weekly Streaming Online Video

It’s an over-the-top video world. Parks Associates July 1 said new data showed the number of hours per week consumers spend watching online video has almost doubled from 3.6 hours per week in 2017 to nearly seven hours per week in 2020. Dallas-based Parks said at the same time traditional pay-TV service has declined from an adoption rate of 75% to 62% in U.S. broadband households between Q1 2017 and Q1 2020, which led a subsequent decline in set-top box adoption.

“Consumer surveys find that 74% of U.S. broadband households subscribe to at least one streaming service, and almost half of domestic broadband households subscribe to two or more services,” contributing analyst Dr. Kenneth Wacks said in a statement.

Wacks said the top three domestic OTT subscription services remain Netflix, Amazon Prime Video, and Hulu. Newcomers Disney+ and Apple TV+ have grown quickly to round out the top five. Additional services of note include CBS All Access, Crackle, Fubo TV, BHO Not, Philo, Pluto TV, and Sling TV.

Parks said the OTT services allow households to access premium video content without a set-top box, forcing a change in the relationship between set-top box makers and cable/satellite operators. Content developers and networks are now streaming content directly to consumers or distributing through OTT service providers. In some cases, multiple-system operators (MSOs) are launching their own streaming devices or creating offerings similar to vMVPDs (virtual multichannel video programming distributors) with the goal of recapturing pay-TV cord-cutters or cord-nevers.

Parks contends the pay-TV set-top can remain viable if able to aggregate the variety of different streaming services coming into the households and present them in a personalized and attractive UI with voice and smart home controls for an improved consumer experience.

“The set-top box does have a role in this market, but it will have to adapt,” Wacks said.

Parks: OTT Service Churn Rate Jumped to 41% During Q1

While consumers have jumped into streaming, they have been more fickle about committing to OTT services during the pandemic.

The churn rate for OTT services increased from 35% in Q1 2019 to 41% in Q1 2020, according to research from Parks Associates.

During the COVID-19 crisis, more than two in five U.S. broadband households have trialed an OTT service, and 8% of households have trialed four or more services, according to the report.

“We are seeing a record number of consumers experiment with new OTT services as a result of the COVID-19 crisis and the shifts in strategy in the industry,” Steve Nason, research director of Parks Associates, said in a statement. “OTT services are offering extended free trials to build up engagement, and 8% of U.S. broadband households report they have subscribed to at least one new OTT service since the COVID-19 crisis began.”

Among these new subscribers, 49% subscribed to Disney+ and 27% subscribed to Apple TV+, according to Parks.

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A key question going forward is whether subscribers will keep these services as fewer households shelter-in-place, according to Parks. A significant challenge, especially for services relying on original programming, is delivering new content since production on many series has halted, according to the report.

“The industry is working on new hybrid content strategies as a result of production halts,” Nason said in a statement. “Major players like AT&T for Warner Brothers and Comcast for Universal Studios are greatly concerned about the delays in content production on the launches of new services, like HBO Max and Peacock. Free trials will bring in new subscribers at the launch, and roughly seven in ten have subscribed to at least one OTT service they have trialed. OTT services need to be creative in building an engaging service, but during this time of heavy video consumption, OTT services have the opportunity like never before to win over new video consumers and retain them as long-term subscribers.”

Parks: Adoption of Standalone Broadband Service Increases 42% — Driven by Streaming Video

In an over-the-top video ecosystem, demand for high-speed Internet service, or broadband, continues to remain strong. New consumer research from Parks Associates finds the market for standalone Internet service (excluding pay-TV, telephone) rising from 34% in 2017 to 42% in 1Q 2020.

Parks found the average standalone broadband subscriber now pays $60 per month for service, which increased by 36% from 1Q 2012 to 3Q 2019, while payment for TV plus Internet services increased from $107 to only $127 over the same time period.

“Data speed is the primary driver of [average revenue per broadband user],” David Drury, research director, Parks Associates, said in a statement. “In other words, speed rather than the number of [value-added services] broadly determines ARPU levels, even though those with higher speeds also have a higher number of VAS.”


Coronavirus-related changes in the needs of broadband households indicated that many consumers are likely trying many VAS for the first time, particularly telehealth, video conference, and remote learning tools. The increase in consumer need for these services represents an enormous opportunity to grow these markets even after the crisis passes, according to Parks.

The research finds nearly one-half of U.S. broadband households receive at least one value-added service from their service provider, but these services are generally included at no additional cost. The most commonly adopted VAS are support, antivirus, streaming video, and Wi-Fi services. AT&T and Suddenlink by Altice subscribers have the highest number of VAS adopted overall, combining both free and paid services.

“Broadband growth has plateaued, so the next opportunity is in VAS,” Drury said. “Providers have generally used VAS as a marketing tool to attract and retain subscribers, so for them to make the transition to a revenue source, companies need a clear understanding of the gaps in consumer satisfaction and demand for strategic and successful VAS deployments.”

Parks: 54% of U.S. Broadband Homes Own a Smart TV

It’s an over-the-top video world. So, it’s not a surprise that new data from Parks Associates June 24 finds more than 50% of U.S. broadband households own at least one smart TV, making the Internet-connected TV the primary platform for video streaming services at a time when content consumption is increasing dramatically.

Dallas-based Parks found that from Q1 2019 to Q1 2020, more than six million domestic broadband households cut the cord on their traditional pay-TV service, primarily transitioning to OTT services or broadcast TV via antennas for video content.

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The COVID-19 crisis further changed how households consume video from both a device and service perspective, and its impacts will continue even as states lift shelter-in-place orders, according to Parks. U.S. broadband households are consuming on average more than 20 hours of video content weekly on the TV, an increase of nearly 40% from 2017.

“Nearly one-third of U.S. broadband households cite a smart TV as their primary streaming video device, nearly double the rate of streaming media players and computers,” research director Steve Nason said in a statement. “When looking specifically at online video content, the smart TV is the only measured device seeing a year-over-year increase as the primary streaming video device,” Nason said.

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The analyst said smart TV continues to improve its perceived value to consumers across a variety of key features and technologies.

[The units] are steadily improving their scores in ease of navigation and ability to find content or discover new apps, supplanting other video devices in the house to become the main source for video content,” he said.

Parks said improved user features come at an important market inflection point, where consumers are watching more video at home while also cutting the cord on pay-TV, leaving them to search for content on their own, across multiple services.

“We’ve seen broadcasters incorporate smart TVs and connected devices more and more into their app strategy, and those that have are seeing a huge uptick in overall consumption and user engagement,” said Jonathan Laor, co-founder/CEO, Applicaster, which assisted Parks with the research. “Over the past few months we’ve also seen end users going to their mobile devices for subscribing to new services, and a dramatic increase in their consumption on TVs, making TVs the new champions of viewer retention.”