Survey: Nearly Half of American TV Viewers Have Already Cut the Cord

Non-pay-TV consumers are set to become the predominant TV consumer in the next year, according to new data from The Trade Desk. Based on answers of more than 4,000 adult respondents from April 27 to May 5, the fourth “Future of TV” survey found that 47% of American TV viewers are already cordless, while 44% of Americans with cable TV anticipate pulling back or cutting service in the coming year.

Cord-cutting accelerated as programming such as live sports became unpredictable through the COVID-19 pandemic and consumers’ appetite for on-demand content grew. The shift to connected TV appears to be solidifying, with the majority of TV viewers aged 18 to 34 and 35 to 54 (60% and 53%, respectively) already without cable. These age groups are among the most coveted by advertisers.

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Streaming skyrocketed in popularity — even for sports viewing, which has traditionally been a driver for linear TV viewing. According to the survey, only 19% of TV viewers are returning to their pre-pandemic sports viewing habits. Meanwhile, 44% who watch sports are choosing a primary viewing source outside of linear TV. That number increases to 65% among sports viewers aged 18 to 34.

“We are entering a new TV normal, where new streaming viewing models sit side by side with traditional TV formats,” Tim Sims, chief revenue officer of The Trade Desk, said in a statement.

Sims said the shift to Internet-connected TV presents an opportunity for marketers to reach streaming TV viewers with more precision and accuracy because they can apply data to marketing campaigns in a way that’s not possible with linear.

“It provides incremental reach that’s an important element of a comprehensive TV ad campaign,” Sims said.

The research also indicates the current TV content arms race cannot be financially sustained for providers or consumers without relevant advertising, and consumers are becoming more receptive to advertising even on CTV.

According to the study, more U.S. TV viewers report watching streaming content with ads (44%) than without ads (33%). Indeed, nearly two-thirds of U.S. TV viewers (64%) don’t want to spend more than $30 in total per month on streaming services, making free or lower-cost ad-supported services more attractive to consumers.

A separate survey of 150 advertisers found that 92% of marketers believe that CTV is as good as, or outperforms, linear-TV advertising. New advertising budgets support this view, with 45% of marketers increasing their CTV budgets over the last year. Among those who shifted budgets to CTV, 91% said they will maintain those shifts or increase investments in CTV.

These benefits are particularly apparent for marketers when thinking about TV event advertising. In fact, 74% said that buying CTV ads in conjunction with live sports events can be more cost effective and impactful than classic sports sponsorships.

“Today’s marketers are under a lot of pressure to prove the ROI of every advertising dollar, and that has encouraged marketers to think about how CTV can provide incremental value as part of a TV ad campaign,” Sims said. “Advertisers want better cross channel measurement and the ability to tie that measurement to actual business outcomes. That means CTV is becoming an increasingly important component of most contemporary marketing plans.”

Report: 27% of U.S. Households Plan to Cut Cable TV in 2021

American households are cutting the cord on their cable TV subscriptions more rapidly than previously reported, according to a new survey of more than 2,100 U.S. consumers by The Trade Desk. The data shows 27% of U.S. cable TV subscribers are planning to cut their subscriptions by the end of 2021. That percentage is nearly double the 15% of cable subscribers who reported cutting the cord in 2020, and significantly higher than the approximate 3% annual decline cited separately eMarketer prior to 2020.

The coronavirus pandemic has accelerated consumer behaviors and trends that are defining a new era of TV consumption. With more U.S. consumers working at home, many under increased budget pressure, and with the broader availability of streaming services, streaming consumption now accounts for 68% of TV viewing versus 28% for traditional TV viewing.

Even live sports can’t keep viewers tethered to traditional TV as more U.S. households turn from cable to streaming platforms to watch their favorite teams. After a pause in live sports caused by the pandemic, almost 39% of sports viewers are now watching live sports events via connected TV such as ad-supported streaming and social media platforms, according to the survey. Only 30% of U.S. consumers cite live sports as a reason for maintaining a cable TV subscription — significantly down from the 60% that cited live programming, including sports, just nine months previously.

“COVID has accelerated cord-cutting trends that were already underway, to a point where less than 50% of U.S. households today have a cable subscription,” Tim Sims, chief revenue officer of The Trade Desk, said in a statement.

Sims said the decline is not because consumers have fallen out of love with TV, but that there are now more convenient ways of consuming it. That even applies to traditional cable mainstays, such as live sports.

“As more broadcasters launch and expand their streaming services, these gaps are only going to widen,” he said.

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As Americans shift to connected TV, there’s a limit to their tolerance for subscription services. Fifty-one percent of U.S. consumers are unwilling to spend more than $20 in total per month on streaming subscriptions, according to the survey. Furthermore, TV viewers are more than five times more likely to prefer free or low-cost streaming TV with ads, over streaming services with higher monthly subscription fees with no ads (72% versus 14%).

Advertisers Follow the Audiences; Rethinking Upfronts and CTV Skills Development

As traditional TV consumption declines and CTV viewership continues to rise, marketers are embracing the CTV opportunity. A separate survey of 150 advertisers conducted with Advertiser Perceptions found that, among marketers who had revised their TV plans as a result of the pandemic, CTV ranks as the #1 channel choice as marketers reallocate campaign budgets. Furthermore, marketers state that CTV now represents 18% of their advertising spend moving forward, a significant acceleration from a standing start in recent years.

But this shift means that marketers must rethink their longstanding ad-buying habits, as well as the necessary skills investments in their teams, to capture shifting audiences. For example, the majority (59%) of linear TV buyers said they are making fewer upfront commitments in 2021, with ad dollars moving from traditional TV programming to CTV.

In addition, marketers are rethinking how they can better equip themselves with the skills and capabilities to develop the right teams to keep pace with the accelerated shift to CTV. According to the advertiser research, ad buyers will focus on CTV marketing skills in 2021, as 37% said they intend to hire new talent fluent in CTV. And more than half (55%) said they plan to take steps to ensure their current TV ad buying teams can navigate both linear and CTV channels.

Every aspect of the decision-making process of TV advertising, including measurement, frequency and creative, will have to evolve as more consumers shift to CTV. And marketers are recognizing just how critically important CTV is to their advertising strategies if they want to win the hearts and minds of consumers. According to the survey, the top focus areas for CTV ad buyers are:

  • The shift from a content-first to an audience-first approach — prime-time is now anytime, as marketers are no longer tied to a schedule.
  • More focus on integrated, cross-channel strategies — to improve the viewer experience, manage frequency and better target specific audiences.
  • Focus on non-traditional ad formats — especially shorter ads.

 

“The TV ad business is at a tipping point. Advertisers can reach more households via CTV than via traditional linear TV for the first time. That trend is not reversing,” said Sims.

Report: Brits Want Their SVOD for Free

British rock band Dire Straits famous 1985 song “Money for Nothing” mocks pretty boys getting “their chicks for free.” New data from tech company The Trade Desk suggests British consumers love subscription video-on-demand — they just don’t want to pay for it.

In a recent survey, 70% of respondents said they wouldn’t spend more than £20 monthly ($25) on streaming services, a decline of £5 ($6.26) compared with a separate survey in September 2019. The research company contends the change in consumer attitude could result in a revenue loss of approaching £100 million ($125 million).

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“While people want access to a variety of premium content, there’s a limit on how much they’re willing to pay. And with purse strings tightening, it’s time to think about how ad-funded models could benefit consumers, as well as supporting multiple streaming services,” Dave Castell, GM of inventory and partnerships at The Trade Desk, said in a statement.

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As a result, Castell believes the limit on SVOD subsciption spending is a boon to ad-supported VOD, including services such as ViacomCBS’s Pluto TV.

“This data reveals a clear willingness among U.K. consumers to accept advertising if it means accessing their favorite shows for cheaper prices, or for free, but it’s vital that it’s done right,” the analyst said. “Ads must be creative, relevant and appropriately timed to keep consumers content. In doing so, streaming platforms can generate the revenue they need to keep creating the engaging, entertaining TV that Brits clearly crave, without charging the bill back to them.”

New Survey Suggests Fee, Ad Limits Among U.S. OTT Video Consumers

A majority of survey respondents (59%) are not willing to pay more than $20 a month for over-the-top video services, according to new data from more than 2,600 U.S. consumers by The Trade Desk. Another 75% of consumers will not pay more than $30 a month.

The online survey was conducted by YouGov from Nov. 19-21, 2019, with a total sample size of 2,613 adults in the U.S.

As more TV content providers launch streaming services in 2020, the results highlight the subscription fatigue threshold for TV streaming services, where on-demand movies, TV shows and live events can be accessed by connected devices such as smart TVs and mobile devices.

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“With consumers experiencing subscription fatigue and unwilling to subscribe to more than one or two premium services, broadcasters have to figure out how to continue to fund this new golden age of TV,” Brian Stempeck, chief strategy officer of The Trade Desk, said in a statement.

More than half of U.S. households (53%) subscribe to Netflix, followed by Amazon Prime Video (43%) and Disney-owned Hulu (29%).

In addition, with some media companies pushing ad-supported VOD, the survey found the leading cause of frustration with ads is having to watch the same commercial repeatedly (cited by 46% of respondents).

More than half (53%) of U.S. consumers would be open to watching ads (every other episode of their favorite show) if it meant lowering the cost of subscription streaming services.

More than two-thirds (68%) of U.S. consumers (with no preference to tailored TV ads) would be willing to watch ads relevant to their interests if it meant watching fewer ads overall.

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More than half (51%) of respondents who watch new episodes of their streaming TV show on an app, after it premieres, watch on a smart TV.

As more U.S. consumers watch TV content via streaming services, content providers are under pressure to produce new premium content that drives membership and viewership. This research suggests, however, that there are hard limits to consumer appetite for subscription-based services.

The survey indicates a willingness from consumers for streaming services supported by ads, particularly if the format and pacing of commercial breaks differ from traditional TV content.

More than half (53%) of respondents are willing to watch ads every other episode to lower their monthly costs on a device that doesn’t show any ads. Forty percent of consumers would prefer ads tailored to their interests and preferences, but, among those who said they wouldn’t, that number increases to more than two-thirds (68%) if it meant they would see fewer ads.

Despite the mobile nature of streaming apps, consumers have shown they still prefer to view content on the largest screen in their home – the television. More than half (51%) of those consumers who watch new episodes of their favorite shows on an app after it premieres watch a TV show on their connected televisions, rather than a mobile device or on their personal computer.

“This [research] indicates that ads will fund the future of streaming TV, and that broadcasters and advertisers have an opportunity to improve the advertising experience in a way that simply is not possible with traditional, linear TV,” Stempeck said.