The average number of streaming services used by consumers in the US decreased from 11.6 in Q4 2022 to 10.9 in Q2 2023.
According to research undertaken by TiVo, this was followed by a decrease in consumer spending from an average of $189 a month to $170 over the last six months. While consumers are undoubtedly reconsidering their spending habits, this change has shown growth in consumer video consumption; the report saw a jump from 4.4 hours a day in video consumption in Q4 2022 to 4.7 hours per day.
When looking at how respondents spent their time watching video, the report found that AVOD and FAST consumption increased considerably from Q4 2022. This increase is a reflection of consumer budget constraints and major SVOD companies offering lower-cost services that generate higher ad revenue. This new SVOD/AVOD hybrid structure allows users to consolidate their subscriptions, cut costs and still watch the same or more amount of content. With less disposable income available among consumers, the demand for flexibility in entertainment choices has surged in response to the evolving preferences in entertainment over the recent years.
The report notes that as entertainment consumption rises, content discovery continues to be a pain point for many consumers. When trying to select a movie or show, 82% of consumers are prone to browsing before making a final selection – with over 60% use multiple apps in their pursuit.
According to Scott Maddux, VP of global content strategy and business at Xperi, “Consumers know what they want in a video service and are adjusting their entertainment habits to fit their needs – whether that be cancelling their SVOD subscriptions or reviving their cable.
“As we continue to see this shift in consumer behaviour it’s essential that entertainment providers focus on solving consumer content discovery issues to help consumers who are juggling their entertainment needs get back to what’s important, enjoying entertainment”.
Additional TiVo Video Trend Report Highlights:
• TV is King: In competition with other devices like smartphones, tablets, and computers, TV remains the preferred choice by more than 3x other types of devices for watching video. Although, preference for watching on TV is slipping, with only 63.7% currently reporting a preference for watching content on this device – compared to 73.4% in Q2 2022. The drop appears driven primarily by pay TV subscribers.
• Word of Mouth Leads Discovery: When it comes to discovery methods, the percentage of those who find out about new TV shows or movies from commercials has declined 6% year-over-year. In comparison, word of mouth and recommendations from friends remain as strong as ever, inching out commercials as the most common method of discovery in the spring of 2023.
• Local Content Remains Important: While virtual multichannel video programming distributor (vMVPD) continues to be a top competitor to pay TV, 28% of people who cut the cord later decided to resubscribe to traditional TV to solve their need to watch sports, live events and local programming. Of all time spent watching video, 22.6% was spent watching different types of local content.
Trends To Watch
As the entertainment industry continues to grow and shift, Xperi is noting the following trends as ones to watch:
• In-Car Media Consumption on the Rise: Of those who watch video in the car, over 80% do so at least a few times a month, with 49.8% saying they do so to pass the time while waiting for something. The introduction of larger in-cabin screens in vehicles marks a pivotal moment in the evolution of in-car entertainment, allowing consumers to easily access and enjoy video content within the car.
• Subscription Seasonality Spikes: As consumers become more agile in managing their entertainment needs, a rise in cord reviving or adjusting subscriptions based on when live events or show premiers launch may increase in popularity. The report found that one of the top reasons consumers signed up for a SVOD service in the last six months was because it had one specific show or movie they wanted to watch (31.9%)
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• Smart TV Brand Loyalty Will Remain Strong: As the use of smart TVs continues to increase, so will smart TV brand loyalty. A trend emerging from the report shows that only 1.6% of respondents with three or more smart TVs in their home have three different brands.
