Consumers Decrease Streaming Services, Spending, But Increase View Time

• by Karlene Lukovitz  @KLmarketdaily, Yesterday

The average number of streaming services used by consumers decreased from 11.6 in Q4 2022 to 10.9 in Q2 2023, and their average streaming spending declined from by nearly $20 a month, from $189 to $170. 

Yet, average time spent watching all types of streaming video rose from 4.4 hours to 4.7 hours per day, or 6.8%, during the same six-month period. Meanwhile, time spent watching pay TV services declined. 

That’s according to the latest video trends report from TiVo, based on a survey of 4,518 North American adults in Q2. 

Time spent with subscription-based video-on-demand/SVOD services rose 4%, to account for 30.7% of overall viewing time; ad-supported VOD/free, ad-supported services and social video view time rose 6%, to a 28% share; and vMVPD time rose 1%, to a 7.6% share, while time spent with cable and satellite pay-TV services dropped 7%, to a 28.1% share. 

The increase in AVOD/FAST reflects consumer budget constraints and major subscription video on demand (SVOD) companies launching lower-cost, ad-supported tiers. This new SVOD/AVOD hybrid structure has provided consumers with more flexibility, letting them consolidate subscriptions, cut costs and still watch the same or more amount of content, says TiVo.

“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,” said Scott Maddux, VP of global content strategy and business at TiVo parent company Xperi. 

The average number of paid video services per household declined from 7.6 to 6.9 in the first half, although that was up from 6.7 in Q2 2022. The average number of nonpaid services upticked from 3.2 in Q2 2022 to 3.9 in Q4 2022 to 4 in Q2 2023. 

As in the past, consumers with higher household incomes reported using more sources, but the gap was considerably smaller in Q2 2023. 

However, income is not as large a driver of number of sources as geography and age. For example, U.S. respondents reported 12 sources, on average, to Canadians’ 7.1.

Younger consumers continue to use more sources, on average. But in Q2, Millennials decreased their number of video sources by 11%, to 13.5, while all other age groups increased their sources by significant percentages -- including boomers, up 42%, to 7.4 sources.

In Q2 2023, Tubi beat out Roku Channel to become the most commonly used AVOD/FAST service in North America, according to this survey. Other top services include Pluto TV and Freevee. 

72% of all AVOD/FAST viewers noted watching some form of free livestreaming TV or FAST channels. In Q2 2023, those accounted for roughly half the viewing time of all AVOD/FAST services. 

While Netflix, Prime Video, Disney+ and Hulu remain the most commonly used SVOD services, the number of viewers who use Peacock’s ad-supported tier rose 4%, to 63.3%, surpassing Hulu, at 54.6%, and Paramount+, at 51.7%.

Social video users grew from 80% in Q4 2022 to 85% in Q2 2023. YouTube dominates social video content, with 54% of respondents listing this as their most commonly used social video

source. Only 20.0% of all respondents ranked TikTok. 

While 22.9% of respondents have canceled a service in the last six months, 28.7% started subscribing to a new service. That is down from 34.4% who started subscribing to a new service in Q4 2022, but remains consistent with Q2 2022 numbers. Over 44% of respondents say they usually continue subscribing

to a new service for at least one year, a YoY increase of about 3%. Forty-one percent say they have room in their budgets for additional services. 

Large libraries of good content and good original programming ranked first and second in reasons for signing up for a new SVOD (cited by 42% and 32.5%, respectively), but wanting to watch one specific show or movie was third (31.9%). 

Nearly a quarter (22.6%) of video time is spend watching local content, and a stable 59% of respondents consider it somewhat or very important. Forty-two percent consider local sports content important — up 7% from Q2 2022 — and 66% and 69% consider news and weather important, respectively (both unchanged year-over-year). 

In fact, 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. 

Seventy-one percent of respondents reported having pay-TV subscriptions in Q2 2023, compared to 73% in Q4 2022 and 74% in Q2 2022. Twenty-seven percent of those with pay TV service said they plan to cut the cord within the next six months—down from 29% in Q4 2022, although up from 23.4% in Q2 2022. 

Ad-free SVODs still have the highest content quality rating, but it slipped notably over this past year. vMVPDs and AVODs saw their ratings rise slightly. Ad-supported SVODs still lag ad-free ones by 11 points, and AVODs/FASTs lag them by 17 points. TV network apps’ rating declined slightly. 

Content discovery continues to be a pain point, with 82% of consumers saying they’re prone to browsing before making a final selection, and over 60% using multiple apps in the process. It’s “essential” that entertainment providers focus on solving consumer content discovery issues, stresses Maddux. 

When it comes to discovery methods, word-of-mouth remained strong year-over-year, which put it on top, over streamers’ ad campaigns, as the percentage of viewers citing commercials as a top resource drop by six points year-over-year.

 

As for devices, TV remains the preferred choice by more than 3 times other types of devices for watching video. Preference for watching on TV, however, has declined substantially since the spring of 2022, with only 63.7% currently reporting a preference for watching content on this device. The drop appears driven primarily by pay TV subscribers. 

Video now accounts for 17.6% of entertainment consumed in cars, versus 82.4% audio, and 80% of those who watch video in cars say they do so at least a few times a month.