I pay for six video streaming services, and I am not alone according to Nielsen’s most recent State of Play report. Released this month, the report reveals that consumers 35-49 spend the most money among all age segments on streaming services, with 24% paying for five or more. In 2019, only 3% of ALL paid video subscribers had 5+ paid services. In 2022 that percentage is now 17%!
Not all Streaming is Created Equal
Among the streaming landscape, subscription-based video on-demand (SVOD) is currently seeing the highest share of streaming minutes (think Netflix and Hulu) at 53%.
Ad-supported video on-demand (AVOD), services that rely on ad dollars and are free for consumers, account for 25% of time spent streaming (examples include YouTube, Tubi, and Pluto TV).
10% of streaming minutes are spent with multichannel video programming distributors (MVPDs) and virtual MVPDs (vMVPDs). MVPDs are cable and satellite services like Comcast and DirectTV, while Virtual MVPDs (vMVPDs) are those same type of providers that don’t require a wired connection. Sling TV and Hulu+ Live are examples of vMVPDs.
Impact on Media Landscape
As internet connectivity everywhere has become mainstream, an already fragmented media landscape has become even more so. Consumers are hungry for content and companies are scrambling to oblige. However, consumers find the quantity of options that now exist overwhelming.
- Despite the abundance of video streaming options, Linear TV remains the highest reach vehicle
- The average American spends almost five hours watching TV daily, 60% of which is on Linear TV
- Consumers aren’t “replacing” their traditional TV options, but are supplementing with services that distribute appealing content
Content Explosion
The growth in streaming services brings with it an explosion of content and has shifted streaming’s place within the video ecosphere:
- Most content created in the last two years was developed specifically for streaming over the top (OTT) release
- Consumers are increasingly seeking content they identify with and that reflects who they are, often this means consuming diverse content outside of the biggest channels
Implications
The abundance of streaming choices brings new opportunities and challenges for both consumers and marketers. Consumers feel overwhelmed by endless options and struggle to find what they are looking for. Many consumers now wish for more streaming content bundles, pivoting slightly from the “cord cutting” mentality which began around 2007- a movement that called for ditching cumbersome cable and satellite packages.
The opportunity for marketers to engage more diverse audiences has increased thanks to the many streaming options allowing for niche content appealing to people from distinct cultures, ethnicities, and backgrounds. AVODs like Pluto TV and Tubi are seeing more diverse audiences than both traditional TV and SVOD options, with Black audience compositions between 36%-39%. YouTube’s audience is now 21% Hispanic.
Changes in audience behavior no doubt will continue to shape the future of streaming, we at Media Works are excited to see what’s next and help our clients navigate the shifts.
Written by Account Manager, Jen Witherspoon.
