Table of Contents
Executive Summary
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- The issues
- Majority of 25-44s dissatisfied with standard pay TV fare
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- Figure 1: Satisfaction with content, by age, August 2017
- Figure 2: Intent to change or cancel pay TV service, by age, August 2017
- Digital stores ignored
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- Figure 3: Use of digital video stores, by gender and age, August 2017
- Cord-cutting on the table
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- Figure 4: Intent to change or cancel pay TV service, by parental status, August 2017
- The opportunities
- Households willing to carry multiple online subscriptions
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- Figure 5: Use of multiple sVOD services, August 2017
- Households retain resources for increased spend on content
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- Figure 6: Availability of additional discretionary income for TV/movies, by number of children under 18 in the home, August 2017
- sVOD the answer, not the problem
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- Figure 7: Usage of sVOD, pay TV subscribers vs nonsubscribers, August 2017
- One big hit
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- Figure 8: Role of exclusive content in sVOD, by gender and age, August 2017
- What it means
The Market – What You Need to Know
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- sVOD shows dramatic growth
- Limited conflict between pay TV, sVOD, social, and short
- Resources available for growth
Market Size
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- Home video hits new high
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- Figure 9: US home video* sales, at current prices, 2012-17
Market Breakdown
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- Subscriptions driving home video
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- Figure 10: US home video sales*, by segment, at current prices, 2015 and 2017
- Use of digital stores
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- Figure 11: Use of digital video stores, by gender and age, August 2017
Market Perspective
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- Free online content has little impact on sales
- Pay TV subscribers more likely to consume social video
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- Figure 12: Use of social video, pay TV subscribers vs nonsubscribers, August 2017
- Audience for professional ad-based content limited
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- Figure 13: Use of short-form professional content, pay TV subscribers vs nonsubscribers, August 2017
- Pay TV subscribers more likely to carry sVOD, use digital stores
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- Figure 14: Usage of sVOD, pay TV subscribers vs nonsubscribers, August 2017
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- Figure 15: Use of digital video stores, pay TV subscribers vs nonsubscribers, August 2017
- Resources for increased spending remain available
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- Figure 16: Availability of discretionary income to spend on TV/movies, by number of children under 18 in the home, August 2017
- Asians least likely to have used full budget
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- Figure 17: Availability of discretionary income to spend on TV/movies, by race and Hispanic origin, August 2017
Market Factors
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- Hardware for streaming content
- Smart TVs, streaming players owned by only a minority of viewers
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- Figure 18: Sling TV Roku Express promotion, September 2017
- Figure 19: Ownership of smart TVs and streaming media players, January 2014 vs June 2017
- Smartphones near universal penetration, majority own tablet
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- Figure 20: Ownership of smart TVs and streaming media players, January 2014 vs June 2017
- Tent pole programming drives subs
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- Figure 21: Role of exclusive content in sVOD, by gender and age, August 2017
Key Trends – What You Need to Know
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- TVE, on demand libraries gaining adherents
- Households adopt multiple sVOD services
- Basic fare not impressing
What’s Working?
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- Use of TVE and on demand libraries emerging
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- Figure 22: Use of on demand libraries and streaming apps, August 2017
- Younger adults growing TVE usage
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- Figure 23: Use of on demand libraries and streaming apps, by gender and age, August 2017
What’s Struggling?
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- Impressions of basic cable
- In their own words:
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- Figure 24: Satisfaction with content, by age, August 2017
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- Figure 25: Satisfaction with content, by race and Hispanic origin, August 2017
What’s Next?
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- Multiple sVOD subscriptions
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- Figure 26: Use of multiple sVOD services, August 2017
- Younger men, dads committed
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- Figure 27: Use of multiple sVOD services, by gender and age, August 2017
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- Figure 28: Use of multiple sVOD services, by parental status, August 2017
The Consumer – What You Need to Know
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- Income chief element in nonsubscription
- Cord-cutters, cord-nevers not entering fold
- Movement to cut cords limited
- Limited awareness of emerging options
- Promoting new services to cinephiles
Opting Out of Pay TV
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- Income, not age, driving force
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- Figure 29: Nonsubscription to pay TV, by age and household income, August 2017
- Discretionary income locks some women out of service
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- Figure 30: Nonsubscription to MVPD service, by marital status, August 2017
- It isn’t all economic
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- Figure 31: Nonsubscription to MVPD service, by race and Hispanic origin, August 2017
Understanding the Cordless
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- Majority are cord-nevers
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- Figure 32: Sling TV Roku Express promotion, September 2017
- Figure 33: Previous subscription to pay TV among nonsubscribers, by age, August 2017
- Few to add service
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- Figure 34: Intent to add pay TV service, by household income, August 2017
- Standalone services carry greater potential for growth
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- Figure 35: Interest in movies and sports viewership among nonsubscribers to pay TV, August 2017
- Antennae satisfying
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- Figure 36: Reasons for not subscribing to pay TV service, by household income, August 2017
Changing and Canceling TV Service
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- Aspirations exceed actions
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- Figure 37: Intent to change or cancel pay TV service, August 2017
- Parents see options, worry about them
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- Figure 38: Intent to change or cancel pay TV service, by parental status, August 2017
- Spectrum, telcos most at risk
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- Figure 39: Intent to change or cancel pay TV service, by carrier, August 2017
- Addressing cultural factors in intent to cancel
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- Figure 40: Intent to cancel pay TV service, by location of residence, August 2017
Familiarity with New Services
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- It’s raining services
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- Figure 41: Awareness of new sVOD and vMVPD services, August 2017
- Heading for the low-hanging fruit
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- Figure 42: Awareness of new sVOD* and vMVPD* services, by parental status of children under 18 in household, August 2017
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- Figure 43: Awareness of new sVOD* and vMVPD* services, by location of residence, August 2017
- Uphill battle to explain value of new services
- In their own words:
The Heavy OTT User
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- Usual suspects heavy users
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- Figure 44: Number of OTT video sites/apps used, by gender and age, August 2017
- Heavy OTT users carry tVOD sales and TVE adoption
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- Figure 45: Subscription to pay TV, use of TVE and tVOD, by number of OTT video sites/apps used, August 2017
- Heavy OTT users spend more on content
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- Figure 46: Monthly spend on TV and movies, by number of OTT video sites/apps used, August 2017
- Heavy content users most aware of new services
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- Figure 47: Awareness of new SVOD* and vMVPD* services, by number of OTT video sites/apps used, August 2017
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – Market
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- Figure 48: US home video sales*, at inflation-adjusted prices, 2012-17
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Appendix – Key Players
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- Figure 49: Video subscriptions to leading pay TV service providers, Q2 2016-Q2 2017
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Appendix – Consumer
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- Digital store usage
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- Figure 50: Use of digital video stores, by location of residence, August 2017
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- Figure 51: Use of digital video stores, by race and Hispanic origin, August 2017
- Intent to change or cancel service
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- Figure 52: Intent to change or cancel pay TV service, by race and Hispanic origin, August 2017
- Role of exclusive content in driving subscriptions
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- Figure 53: Role of exclusive content in sVOD, by parental status of children under 18 in household, August 2017
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- Figure 54: Role of exclusive content in sVOD, by location of residence, August 2017
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- Figure 55: Role of exclusive content in sVOD, by race and Hispanic origin, August 2017
- Use of on demand libraries and streaming apps
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- Figure 56: Use of on demand libraries and streaming apps, by parental status of children under 18 in household, August 2017
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- Figure 57: Use of on demand libraries and streaming apps, by location of residence, August 2017
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- Figure 58: Use of on demand libraries and streaming apps, by race and Hispanic origin, August 2017
- Use of multiple sVOD subscriptions
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- Figure 59: Use of multiple sVOD services, by race and Hispanic origin, August 2017
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