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Digital Video - US - June 2019

Covered in this report

This report explores consumer attitudes toward and use of digital video, including paid subscription services, free streaming video content, and purchases and rentals of TV and movies. This comes primarily in the form of OTT, free video platforms and vMVPDs.

In order to avoid confusion with consumers, OTT was described to consumers as an “On-demand streaming service (eg Netflix, Amazon Prime Video).”

In order to avoid confusion with consumers, vMVPD was described to consumers as a “Live TV streaming service (eg Sling TV, PlayStation Vue).”

"Streaming and downloading digital videos is the fastest growing medium for video content consumption in the US. Consumers are increasingly cutting cable TV and satellite TV packages for more convenient and affordable streaming services for their video entertainment needs. With more than 200+ streaming services currently available, consumers have more options and flexibility to select their preferred entertainment package than ever before. In a crowded competitive environment, brands will need to succeed on visibility, content and pricing to win over consumers in the digital video space."
- Buddy Lo, Senior Technology Analyst

This report looks at the following areas:

  • Video entertaintment market and landscape
  • Streaming services used
  • Streaming devices used
  • Price sensitivity analysis on the "ideal" streaming service
  • Video streaming behavior

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview and top takeaways
          • The issues
            • Four in 10 consumers still don’t use an on-demand streaming service
              • Figure 1: Video services used, April 2019
            • Video streaming behaviors indicate brands need to compete on content and value
              • Figure 2: Video streaming behaviors, April 2019
            • An optimal price point of $20 leaves little room for multiple services
              • Figure 3: Price sensitivity – Optimal price, April 2019
            • The opportunities
              • Cable cutting trend continues
                • Figure 4: Cable and satellite TV subscription and cancellations, by age, October 2017-November 2018
              • Streaming services have more positive perceptions than cable TV
                • Figure 5: attitudes toward video streaming, April 2019
              • Binge releases negatively impact social engagement with original content
                • Figure 6: Stranger Things weekly social media mentions, 2017-18
              • What it means
              • The Market – What You Need to Know

                • Seven in 10 consumers still use cable TV or satellite TV
                  • Binge-releases costing Netflix precious social capital
                    • In-home 5G could accelerate cable cutting
                      • Non-original programming gets pricey
                      • Market Breakdown

                        • OTT streaming services catching up to cable and satellite combined
                          • Figure 7: Cable and satellite TV subscription and cancellations, October 2017-November 2018
                          • Figure 8: Video services used, April 2019
                          • Figure 9: T-Mobile acquisition direct mail, April 2019
                          • Figure 10: T-Mobile Unlimited Plan – Direct mail, September 2018
                        • Roku and Amazon Fire sticks lead after-market streaming devices
                          • Figure 11: Streaming devices owned, October 2017-November 2018
                      • Market Perspective

                        • Netflix’s binge releases undermine social media engagement
                            • Figure 12: Stranger Things weekly social media mentions, 2017-18
                            • Figure 13: Orange Is the New Black weekly social media mentions, 2017-18
                            • Figure 14: Game of Thrones weekly social media mentions, 2017-18
                            • Figure 15: The Handmaid’s Tale weekly social media mentions, 2017-18
                            • Figure 16: The Walking Dead weekly social media mentions, 2017-18
                            • Figure 17: Ratio of peak social media mentions to average weekly mentions, 2017-18
                        • Market Factors

                          • Younger consumers cancelling satellite and cable
                            • Figure 18: Cable and satellite TV subscription and cancellations, by age, October 2017-November 2018
                          • Market is saturated with over 200 OTT services
                            • Figure 19: Number of US OTT services, 2013- March 2019 YTD
                            • Figure 20: Roku informational email, December 2018
                          • 5G and fiber expansion will reduce need for cable internet – thus cable TV
                            • Figure 21: Verizon Fios online display advertisement, May 2019
                            • Figure 22: Verizon Fios online display ad, April 2019
                          • Non-original programming gets more expensive for Netflix
                          • Key Players – What You Need to Know

                            • Netflix remains the dominant OTT streamer in the space
                              • Amazon Prime Video plays distant second fiddle
                                • Disney goes “all in” on streaming
                                  • Apple TV+ enters the fray
                                    • Smaller streaming services fail to gain traction
                                    • Video Streaming and Downloading Services

                                      • Pay-as-you-go relatively minimal
                                        • Figure 23: Video streaming/downloading services used in the past 30 days, October 2017-November 2018
                                    • What’s Working?

                                      • Netflix remains the dominant digital video platform
                                        • Original programming from OTT services garnering success
                                          • Wall Street recognizes the widespread influence of Roku’s ecosystem
                                          • What’s Struggling?

                                            • Smaller streaming services fail to get mainstream traction
                                            • What’s Next?

                                              • Disney goes “all in” with Disney+
                                                • WarnerMedia also rolling out its own streaming service
                                                  • Virtual reality can bring long-distance viewing parties for fans
                                                    • Figure 24: Walmart Oculus Go acquisition email, November 2018
                                                • The Consumer – What You Need to Know

                                                  • More consumers use OTT streaming services than cable TV
                                                    • Netflix, Amazon Video and Hulu are top three in streaming services
                                                      • Optimal price point of $20 leaves little room for many streaming services
                                                        • HBO NOW subscribers more content sensitive than the general user
                                                          • Amazon Prime Video less vulnerable to password sharing
                                                            • Consumers view streaming more favorably compared to cable
                                                            • Video Services Used

                                                              • Streaming services eclipse cable and satellite TV
                                                                • Figure 25: Video services used, April 2019
                                                              • Younger men a growth market for sports streaming services and live TV
                                                                • Figure 26: Sports and live TV streaming service usage, by gender and age, April 2019
                                                                • Figure 27: Hulu NBA playoffs informational email, April 2019
                                                            • Device Usage

                                                              • Smart TVs and streaming devices bring streaming to the living room
                                                                • Figure 28: Devices used to watch streaming/downloaded videos in the past seven days, October 2017-November 2018
                                                                • Figure 29: Devices used, by video services used, April 2019
                                                              • Older consumers more likely to use cable/satellite on traditional TV
                                                                • Figure 30: Cable or satellite TV use, by age, April 2019
                                                                • Figure 31: Distribution of age, by devices used, April 2019
                                                            • Over-the-top Streaming Services Used

                                                              • Netflix Amazon and Hulu round the top three in streaming services
                                                                • Figure 32: OTT streaming services used, April 2019
                                                              • Gen Z and Millennials biggest participants in video streaming
                                                                • Figure 33: OTT streaming services used, by generation, April 2019
                                                              • Starz’ Power draws Black consumers to the service
                                                                • Figure 34: OTT services used – Starz, by race and Hispanic origin, April 2019
                                                                • Figure 35: Starz Power renewal email, September 2018
                                                              • Majority of consumers use two or more OTT services
                                                                • Figure 36: OTT streamers, by number of streaming services used, April 2019
                                                                • Figure 37: OTT streaming services used, by number of OTT streaming services used, April 2019
                                                              • Younger consumers use more OTT services, regardless of income
                                                                • Figure 38: Distribution of age and household income, by number of OTT streaming services used, April 2019
                                                            • Digital TV Services Used

                                                              • High churn rate likely among live TV streaming
                                                                • Figure 39: Digital TV services used, April 2019
                                                                • Figure 40: Video services used, by streamers and free trial subscribers, April 2019
                                                            • Video Streaming Behaviors

                                                              • Behaviors point to value and content-oriented users
                                                                • Figure 41: Video streaming behaviors, April 2019
                                                              • Account sharing more prevalent among younger consumers
                                                                • Figure 42: Video streaming behaviors – Account sharing, by age, April 2019
                                                                • Figure 43: Distribution of age and household income, by account sharing behavior, April 2019
                                                                • Figure 44: Video streaming behaviors – Account sharing, by age and household income, April 2019
                                                              • 25-34 year olds want popular reruns
                                                                • Figure 45: Video streaming behaviors – Repeat viewing and cancellations, by age, April 2019
                                                              • Brace yourselves, HBO cancellations are coming
                                                                • Figure 46: Video streaming behaviors – Repeat viewing and cancellations, by OTT streaming services used, April 2019
                                                              • Amazon at the least risk of account sharing
                                                                • Figure 47: OTT services used, by account streaming behavior, April 2019
                                                            • Digital Video – Price Sensitivity Analysis

                                                              • Optimal price point on streaming content leaves room for three to four services
                                                                • Figure 48: Price sensitivity – Optimal price, April 2019
                                                              • Black consumers willing to pay more for their ideal content
                                                                • Figure 49: Price sensitivity of ideal digital video package, by race and Hispanic origin, April 2019
                                                            • Attitudes toward Video Streaming

                                                              • Streaming viewed favorably compared to cable
                                                                • Figure 50: Attitudes toward video streaming, by age, April 2019
                                                              • Sports streaming an opportunity to promote social streaming
                                                                • Figure 51: Attitudes toward video streaming – Social streaming, by video services used, April 2019
                                                              • Specialized services appeal to multicultural audience
                                                                • Figure 52: Attitudes toward video streaming – Specialized service, by race and Hispanic origin, April 2019
                                                              • Streaming original movies fall short of younger viewers’ expectations
                                                                • Figure 53: Attitudes toward video streaming – Streaming vs Hollywood, by age, April 2019
                                                            • Consumer Segmentation – Attitudes toward Video Streaming

                                                              • Four segments of consumers identified based on attitudes toward video streaming
                                                                  • Figure 54: Consumer segmentation – Attitudes toward video streaming, April 2019
                                                                  • Figure 55: Video services used, by consumer segments, April 2019
                                                                  • Figure 56: OTT services used, by consumer segments, April 2019
                                                                  • Figure 57: Number of OTT streaming services used, by consumer segments, April 2019
                                                                • Cost Cutters
                                                                  • Characteristics
                                                                    • Figure 58: Profile of Cost Cutters, April 2019
                                                                  • Opportunities
                                                                      • Figure 59: Attitudes toward video streaming – Payments, by consumer segments, April 2019
                                                                    • Traditional Viewers
                                                                      • Characteristics
                                                                        • Figure 60: Profile of Traditional Viewers, April 2019
                                                                      • Opportunities
                                                                        • Figure 61: Attitudes toward video streaming – Streaming vs cable and on the go, by consumer segments, April 2019
                                                                      • Cord Cutters
                                                                        • Characteristics
                                                                            • Figure 62: Profile of Cord Cutters, April 2019
                                                                          • Opportunities
                                                                              • Figure 63: Attitudes toward video streaming – Streaming vs cable and on the go, by consumer segments, April 2019
                                                                              • Figure 64: Video streaming behaviors, by consumer segment, April 2019
                                                                            • Content Hungry Viewers
                                                                              • Characteristics
                                                                                  • Figure 65: Profile of Content Hungry Viewers, April 2019
                                                                                • Opportunities
                                                                                  • Figure 66: Video streaming behaviors, by consumer segment, April 2019
                                                                                  • Figure 67: Attitudes toward video streaming – Streaming vs. Hollywood, by consumer segments, April 2019
                                                                              • Appendix – Data Sources and Abbreviations

                                                                                • Data sources
                                                                                  • Consumer survey data
                                                                                    • Direct marketing creative
                                                                                      • Abbreviations and terms
                                                                                        • Abbreviations
                                                                                        • Appendix – The Consumer

                                                                                            • Figure 68: Cable and satellite TV subscription and cancellations, by gender and age, October 2017-November 2018
                                                                                            • Figure 69: Number of weekly Instagram, Twitter and Pinterest mentions, by program, 2017-2018

                                                                                        Digital Video - US - June 2019

                                                                                        £3,435.47 (Excl.Tax)