March 23, 2017
For the first time, broadband has caught up with pay-TV services as a leading delivery channel for video entertainment. More than two-thirds (68 percent) of consumers subscribe to a free or paid streaming video service compared to 67 percent for pay-TV service providers, according to a “The Changing Landscape for Video and Content,” a new study by the Consumer Technology Association (CTA).
More telling is that streaming services, which rely on broadband connections, are up five percent over 2014, while the pay-TV trend points down, declining by two percent.
Three leading streaming services—Netflix, Amazon Prime, and Hulu—are now found in 64 percent of U.S. households, and half of all adults stream programming for these services on a monthly basis, according to the On-Demand TV study conducted by the Leichtman Research Group.
Consumers’ insatiable desire for on-demand video is a key reason that more that 73 percent of U.S. adults have broadband services in their homes, according the Pew Research Center.
As the number of video options consumers have increases, so does the time spent watching online and the number of devices used. Video viewership has increased to 16.8 hours per week, 30 percent more than in the past five years. Almost half of all video viewing is being done on broadband-connected devices —smartphone, laptop, desktop, tablet— the highest rate it has ever been, according to the CTA. That near 50/50 split represents a dramatic change from just four years ago, when consumers viewed video on television sets 62 percent of the time.
A study by Park Associates found that twice as many pay-TV customers (12 percent) downgraded their pay-TV service in 2016 than upgraded it (six percent). The likelihood of non-subscribers adopting pay-TV has declined since 2012.
As the audience diminishes, so does advertisers’ interest. Research firm eMarketer predicts that 2017 will be the first year digital advertising revenue eclipses TV ad revenue.
Other winners in the rush to streaming services are the over-the-air antenna companies. Since 2013, the percentage of broadband households in the nation using antennas to watch broadcast TV has jumped from nine percent to 15 percent, according to Parks Associates.