Parks: Tech Use Among Seniors 65+ Skyrockets During Pandemic

The pandemic has widened the market for consumer electronics beyond millennials to include aging baby boomers, according to new data from Parks Associates. The Dallas-based research firm finds that during the coronavirus pandemic, 55% of seniors have an online video service subscription like Netflix, Amazon Prime Video and Hulu, while 29% of U.S. seniors ages 65 and older have used video conferencing services, 27% have used telehealth/remote consultation services, and 22% have used a grocery store delivery or pick-up service.

“The shift toward tech service solutions is very pronounced among seniors as a result of COVID-19,” senior analyst Kristen Hanich said in a statement.

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Hanich cited the use of telehealth services more than quadrupling among seniors compared to 2019. These changes pervade all aspects of life, including increasing adoption of video conferencing, over-the-top video and home delivery services.

“Companies deploying connected solutions need a comprehensive strategy that crosses multiple industries, including healthcare, automation, and security, to ensure they maximize the value proposition for their solution,” Hanich said.

Parks: 26% of U.S. Broadband Households Bought Consumer Electronics Device At Beginning of Pandemic

The ongoing coronavirus pandemic has been a boon for consumer electronics. New data from Parks Associates says 26% of U.S. broadband households purchased a consumer electronics device between February and May 2020, at the outset of the pandemic.

“U.S. households bought connected devices for entertainment, work-at-home, and remote learning use cases,” senior analyst Patrice Samuels said in a statement. “Broadband and traditional service providers have opportunities to generate additional revenue by bundling technical support services for emerging connected devices with existing services.”

Parks said the influx of new connected devices is changing the technical composition of the home and driving the need for data-driven support services. A higher percentage of smart home device owners have reported experiencing problems with their devices in 2020 than in 2018, increasing from 14% in Q1 2018 to 34% in Q2 2020. Several factors are driving this increase, including more users, immature technologies, and complex use cases.

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“Twenty-two percent of consumers who recently purchased and set up a CE device reported experiencing difficulty with the setup process,” Samuels said.  “These poor product experiences drive up long-term support costs for brands, but device-generated data, especially when analyzed within the context of a consumer’s technical environment or ecosystem, can yield insights that could reduce or even eliminate these challenges. We will continue to see companies pursue comprehensive support measures for connected devices in order to ensure superior user experiences.”

Bharat Chadda, SVP and global head of technology vertical at Sutherland, said consumers are increasingly looking for a simple product experience with digital and self-help options.

“The right customer experience is necessary to encourage device usability and adoption,” Chadda said.

Parks: 70% of OTT Video Trials End Up As a Subscription

Despite recent cutbacks, most subscription streaming video platforms allow new consumers a free trial period from seven to 14 days. New data from Parks Associates finds that about 40% of U.S. broadband homes trialed at least one OTT service during the COVID-19 crisis and nearly 70% of these households ended up subscribing.

“The use of free trials, promotional offers and bundled packages has accelerated through the first part of 2020, during the initial stage of the COVID crisis,” research director Steve Nason said in a statement.

Parks found that domestic broadband households spent an average of $16 per month on OTT video service subscriptions in Q1 2020, based on consumer-reported spending. The overall OTT churn rate hovers around 40%.

“The conversion of those trials to paid subscriptions has also increased, but to keep those subscribers long term, providers need to deliver a continually evolving and personalized experience,” Nason said.

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The analyst said the data gained from trial user habits and actions offer OTT video service providers an opportunity to engage potential subscribers through every phase of their exploration of the service.

“Companies that effectively integrate smart data are leading the battle to engage the ever-elusive digital media and entertainment consumer,” Nason said. “The overall OTT churn rate has dipped some, but if the economic impacts from COVID-19 pandemic linger, households will continue to scrutinize their spending in entertainment services and determine which ones to keep and which ones to cancel. Smart data usage can give an advantage to a provider in keeping their service at the top of a household’s entertainment equation.”

Parks: 20% of U.S. Broadband Homes Use Ad-Supported OTT Video Services

Who says people don’t like ads with their video? The growth of ad-supported VOD and ad-based SVOD continues among consumers. New data from Parks Associates finds 20% of U.S. broadband households currently use an over-the-top video service with ads, and 15% use a “freemium” service, placing these offerings in a strong second place, among streaming video business models.

“There is no clear market leader in the ad-supported and freemium OTT space, with Pluto TV, The Roku Channel, Tubi TV, Peacock and Crackle all scoring relatively similar adoption rates,” Steve Nason with Parks Associates said in a statement. “The newest offering, NBCUniversal’s Peacock, does have the reach, content and profile to disrupt this area, which could further boost usage of ad-based and freemium OTT among U.S. households.”

Parks finds domestic broadband households in Q1 2020 reported spending an average of $16 per month on OTT video service subscriptions, behind $89 per month on pay-TV services. Consumer spending has been shifting toward OTT services and subscriptions as more households cut or trim their pay-TV services.

“A prolonged economic contraction could drive households to reduce pay-TV spending more, while also scrutinizing their OTT service stacks,” Nason said. “Ad-based services will establish a large role within the today’s OTT service space as consumers look for affordable entertainment options.”

Parks: 25% of Broadband Homes Prefer Streaming to Theatrical New-Release Movies

With Hollywood studios increasingly opting to release new movies directly to consumers instead of the theater, new data from Parks Associates finds 25% of U.S. broadband households now prefer an over-the-top video subscription service to watch new movies, while 24% still prefer movie theaters to experience first-run movie titles.

The findings come as Parks hosts an online panel, “Future of Video,” discussing the value of content and technology innovations such as premium, transactional, and subscription-based VOD platforms delivering new-release movies directly to consumers rather than in the 90-day theatrical window.

Universal Pictures earlier this year, in response to the coronavirus pandemic, moved animated sequel Trolls World Tour from its theatrical slate to PVOD. The decision saw the movie generate $100 million in PVOD revenue, jumpstarting Hollywood’s renaissance with premium priced movies streaming into consumer homes.

“COVID-19 has upended the traditional content-windowing process, and consumer research shows this paradigm shift is impacting consumer attitudes,” research director Steve Nason said in a statement.

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Nason said streaming access in the home scores higher than movie theaters when consumers report their preferences for first-run movies. The analyst contends the shift might be temporary as nearly 30% of survey respondents had no preference for how to watch a new movie.

“[This] gives theaters a glimmer of hope they can eventually gain back some audience for first-run titles,” he said.

Parks: Nearly 10% of U.S. Broadband Households Canceled a Video Service During the Pandemic

New data from Parks Associates research finds that, as of May 2020, 8% of U.S. broadband households canceled at least one video service due to the COVID-19 crisis, including 4% of that canceled a traditional pay-TV service, due in large part to the cancellation of sports programming.

“The lack of sports programming had a significant role in households canceling their pay-TV services early in the pandemic,” senior director Jennifer Kent said in a statement.

Kent contends that with all major sports leagues now resuming play, consumer adoption should bring back many of these canceled households, especially online TV subscribers, who have an easier path to re-subscribe compared to traditional pay-TV.

“However, the ongoing economic crisis could push additional households to trim services,” Kent said. “Service and video providers are shifting to focus on retention and finding ways to keep subscribers through innovative partnerships and unique content.”

Parks reports more than 40% of former pay-TV subs said they would re-subscribe once sports resumed, while more than two-thirds of former online pay-TV subscribers would sign back on.

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Parks: 47% of U.S. Broadband Homes Subscribe to Amazon Prime Video

New data from Parks Associates finds 47% of U.S. broadband households subscribe to Amazon Prime Video, second only to Netflix among subscription-based OTT video services in the U.S.

“The surge in online shopping during the COVID-19 crisis has greatly benefited Amazon Prime Video, which utilizes Amazon Prime as its main access point,” Steve Nason, research director at Parks, said in a statement. “Prime Video leads with its stable of originals plus a massive library of licensed titles, while others such as Disney+ and HBO Max have taken a broad-based aggregator approach by integrating content from its different properties into one unified offering.

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Regardless, Max adoption among HBO pay-TV and non-subscribers continues to improve slowly. AT&T CEO John Stankey told an investor group Max adoption has reached 12.6 million, or 33% of existing HBO pay-TV subs.

“The slow migration of HBO subscribers to HBO Max underscores the importance of distribution strategies in addition to vast content libraries, which WarnerMedia hopes to remedy through its deal with Amazon,” Nason said.

Parks: OTT Video Subscriber Loyalty Up as Churn Drops During Pandemic

During a pandemic, consumers gravitate toward experiences they trust. New data from Parks Associates finds the overall annual churn rate for OTT services, representing those subscribers who have canceled a service as a percentage of the current subscriber base, dropped from 46% in 3Q 2019 to 38% in 3Q 2020. As a subset of subscription-based OTT services, online TV services experienced an even more dramatic drop, from 84% in 2019 to 49% in 2020.

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“Households across the U.S. continue to be primarily homebound or more homebound than they have been in prior ‘normal times,'” research director Steve Nason said in a statement. “They have much more time and opportunity to engage and interact with OTT services and are deciding to stick with services, including midsized and smaller ones, longer than normal. Consequently, we are seeing a lower overall churn rate for OTT services.”

Parks found considerably lower churn rates among Netflix, Amazon Prime Video and Hulu than the overall average for all OTT services. The Disney+ churn rate was at 13%, while HBO Max, Apple TV+, and Peacock was around 20%. For online TV, churn rates remain high, but the pandemic has accelerated the migration away from traditional pay-TV services via a cable or satellite provider while also encouraging extended subscriptions.

“Online pay-TV services that offer bundles of live channels, are a direct beneficiary of the move away from traditional pay-TV services,” Nason said. “This trend, along with the return of live sports, is a huge growth accelerant for services such as YouTube TV, Hulu with Live TV, and fuboTV. As a result, the churn rate for online TV, while still hovering near 50%, has been significantly reduced in this latest release.”

Parks: 40% of U.S. Broadband Households Trialed at Least One OTT Video Service During Pandemic

Parks Associates research finds roughly 40% of U.S. broadband households trialed at least one over-the-top subscription video service during the COVID-19 pandemic. These free trials are important drivers to paying subscriptions, and by leveraging data on viewer activities and preferences, providers can personalize their services to improve subscriber stickiness.

Free trials do not apply to ad-supported VOD platforms such as Pluto TV, IMDb TV, The Roku Channel, Shout! TV and Tubi.

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Dallas-based Parks found that 2% of U.S. broadband households that subscribed to an OTT service during the COVID-19 crisis cite a free trial as a key driver for this new subscription. Average monthly spending on OTT video service subscriptions was $16 in Q1 2020. Two-thirds of domestic broadband households that canceled an online pay-TV service would consider re-activating it when live sports content become available.

“The use of data, which moving forward will be better informed with the use of advancements such as machine learning and artificial intelligence, will guide an improved user experience and content offering,” research director Steve Nason said in a statement.

In November, Parks reported that 61% of broadband households subscribed to two or more OTT services as of 3Q 2020, up from 48% the previous year. Forty-five percent subscribe to three or more, up from 27%, and 31% subscribe to four or more, up from 14%. SVOD services cited included Disney+, HBO Max, Peacock, Apple TV+, CBS All Access, Netflix, Amazon Prime Video and Hulu.

Parks: 45% of U.S. Broadband Households Subscribe to Three or More Video Services, Up From 27% in 2019

The surge in high-profile subscription streaming video platforms launched in 2020 has resulted in consumers gravitating toward more than one SVOD service. New data from Parks Associates contends that 45% of survey respondents subscribe to three or more services such as Netflix, Disney+, Hulu or Amazon Prime Video, up from 27% in 2019.

The survey also found that 61% subscribe to at least two services, up from 48% last year; 31% subscribe to at least four, up from 14%.

The Dallas-based research firm is holding a virtual confab Dec. 14-16, featuring insights from Amazon, Verizon, ESPN, Cox, Cinedigm, Roku and Fandango, among others, to discuss the state of the industry.

The Big 3 of Netflix, Amazon, and Hulu have dominated this market, but the influx of many new content and service options is driving more spending and sampling among households,” Elizabeth Parks, president of Parks Associates, said in a statement. “At Future of Video, we welcome industry players to explore adoption, consumer attitudes, and sustainable business models for OTT services.”

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