Streaming video blasted beyond any tipping point in 2018 and will command even more attention in the coming year, but challenges lie ahead in the fight for viewers’ eyeballs and pocketbooks.
There’s no question consumers love watching — and binging — TV and movies via subscription streaming services. Consumers’ embrace of Netflix and other services continued to rise in 2018, as about 7 in 10 U.S. households (69 percent) now access a subscription to Netflix, Amazon Prime or Hulu, according to Leichtman Research Group. That is up from 52 percent in 2015, the research firm says.
And many homes are watching more than one service. Overall, 43 percent of U.S. households now have more than one streaming video service, up from 20 percent in 2015, Leichtman Research found in its survey conducted in June and July.
The shunning, shaving and cutting of the traditional pay TV cord and the ascendance of content via broadband — admittedly another cord that comes into the home — is supported in another survey released in March by consulting firm Deloitte, which found more than half (55 percent) of U.S. households subscribe to at least one video streaming service. The average subscriber in the survey paid for three services, Deloitte found.
The next symbolic milestone — U.S. homes with streaming services surpassing the more than three-fourths (78 percent) that subscribe to traditional pay TV services — could come close to happening in 2019. However, as streaming video spreads, the trend lines have blurred. That’s because not all the homes that have access to Netflix and other streaming services are paying for them, says Bruce Leichtman, president and principal analyst for Leichtman Research Group.
“There’s a lot of sharing going on,” he said. “And we have to keep in mind, these are not ‘either or’ (because) the majority of all households in America (homes) have both (subscription streaming and pay-TV).”
Streaming video services already outpace pay TV in U.S. homes with broadband (about 80 percent of all U.S. homes, or about 102 million of the 128 million U.S. homes). More than three-fourths of those homes (76.4 percent) use a streaming service like Netflix, Amazon Prime or Hulu, according to research from The Diffusion Group.
Slightly fewer broadband homes, 74 percent, have a traditional pay TV service from a cable, satellite or fiber provider. Another 8 percent use a net-distributed service (or “virtual” pay TV service) such as DirecTV Now or Sling TV, The Diffusion Group found in its survey of 2,000 U.S. adults with broadband service. “Despite subscriber growth for virtual pay TV services, they will not be enough to overcome declines in legacy services,” said Michael Greeson, The Diffusion Group’s president and co-founder. “We see the entire pay TV sector slowly declining in the next five years.”
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SOURCE: USA Today, Mike Snider