Parks Associates’ latest research shows that consumer habits continue to shift around video viewing – now 71% of US internet households use an SVOD service, 42% use an AVOD and/or FAST service, and 18% use a TVOD service.
“Competition is fierce, and the pressure is on to offer unique, immersive content and to have that content available on multiple platforms,” said Elizabeth Parks, President and CMO, Parks Associates. “Consumers today are fatigued by the disjointed surplus of streaming options available. Now, 46% of households have five or more streaming services; average spending has dropped from $80 a month six months ago to $63 a month.”
“There is a divide in household sentiment towards the cost of streaming services,” Parks said. “About an equal number of households agree as disagree that they are spending too much on streaming services. Those who agree they spend too much are likely entertainment enthusiasts who subscribe to and use more services. However, these households may look to cut back soon or embrace more services with advertisements as prices continue to climb higher.”
Other research from Parks shows that 67% of consumers watch social video, 50% watch free ad-supported video, one-third watch pay TV, and 14% use an antenna to watch over-the-air broadcast.
A new white paper from Parks Associates, produced in partnership with JW Player (JWP), reveals streaming service providers operate in a video market expanding into increased complexity and changing viewer habits. Parks Associates research shows an increase in video viewing – now 67% of consumers watch social video, 50% watch free ad-supported video, one-third watch pay TV, and 14% use an antenna to watch over-the-air broadcast. In addition, 65% of US internet households report watching video on a mobile phone, a significant increase from ten years ago, when just 30% regularly watched video on a mobile phone.
The research, Video Delivery: Maximizing Efficiency and Monetization, addresses the challenges of managing content delivery, user engagement, and content monetization with a fragmented tech stack. In addition, the research addresses how operations can be streamlined for cost reduction, mitigation of operational breakdowns, and faster output of content in a variety of formats to diverse platforms.
“The video streaming business is in a transformative stage,” said James Burt, SVP Broadcast Solutions for JWP (JW Player). “It’s full of requirements that change to align with shifts in viewer consumption trends. Streaming management is also technically complex, with broadcasters struggling to balance operational efficiencies with innovation and growth. Yet there are more viewers using digital platforms to consume content than ever before. Streaming companies must review their technology, operations, and productivity and make adjustments to create economies of scale and improve ROI.”
These efficiencies are critical given the fragmented market and new mobility around video viewing — televisions, smartphones, tablets, laptops, exercise equipment, and smart displays are all options today for video consumption, creating a more complex environment for streaming providers to operate.
“In the early days of streaming, services were focused on building subscriber bases through low fees, ad-free programming, and high-quality original content,” said Sarah Lee, Research Analyst, Parks Associates. “Now, to fully monetize these efforts, they need to deliver a consistent, high-quality viewing experience that goes across all platforms.”
The streaming industry has transitioned to more advertising-based models, to bring in additional revenue alongside subscriptions. Parks Associates’ consumer research finds 50% of people who consume video on a viewing device (TV, computer, tablet, or phone) watch a free, ad-supported service (FAST) or ad-based video on-demand service (AVOD) at least once a week. The ads are an equally important part of the experience, as consumers expect ads to be relevant, original, and appropriate to the viewing platform.
“To preserve competitiveness and optimize operations, advertisers and content providers must acknowledge the necessity of investing in modern strategies and technologies that allow for proactive rather than reactive pivots,” Lee said.