55% of U.S. households now get at least one streaming service
Streaming video has reached a tipping point. And that’s bad news for payTV.
More than half (55%) of U.S. households now subscribe to at least one video streaming service, a new survey from consulting firm Deloitte finds. It’s the first time the survey found more than half of homes subscribed to a streaming service.
But it’s not just one service, such as Netflix, finding its way into homes. The average subscriber pays for three, Deloitte says, generating about $2.1 billion in spending monthly.
Among those services, Netflix is the clear leader, with Amazon and Hulu next, according to a recent survey from Parks Associates.
Deloitte found a concurrent “inflection point” for providers of traditional pay-TV service delivered via cable, satellite and fiber. Pay-TV use fell to 63% in 2017 from 75%, the survey found.
And among those who no longer had pay-TV, 27% said they had “cut the cord” within the past year.
There’s much to trouble traditional pay-TV providers in the survey. Nearly half (46%) of pay-TV subscribers said they are dissatisfied with their service, and 70% of all consumers said pay-TV wasn’t a good value. Among current pay-TV subscribers, 56% say they keep pay-TV because it’s bundled with broadband service. Among Millennials (ages 21-34), 22% say they have never subscribed to pay-TV.
“Consumers now enjoy unparalleled freedom in selecting media and entertainment options, and their expectations are at an all-time high,” Kevin Westcott, Deloitte’s vice chairman for U.S. media and entertainment, said in a statement accompanying the report.
Overall, there’s more than 200 streaming services consumers can choose from — and more are in the works.
Among the recent entrants are Philo, a $16-a-month service launched in November with more than 30 channels including AMC, BET, Comedy Central, Discovery Channel and HGTV; and fuboTV ($19.99 first month, $44.99 monthly after that), which has grown from a sports-centric streaming subscription service launched in 2015 to include more than 70 channels including local CBS, Fox and NBC stations over most of the U.S.
In the works: a new ESPN Plus sub- scription service from Disney and, next year, a Disney subscription movie service with Disney, Pixar, Lucasfilm and Marvel movies and original TV series, and a new Fox News Channel streaming service called Fox Nation, expected to be available this year.
The growth could lead to some hard choices for consumers as their monthly streaming bills approach that of a traditional pay-TV service while leading to even more direct-to-consumer streaming options.
All major TV networks plan to launch their own by 2022, says Mike Berkley, an analyst with research firm The Diffusion Group.
“Big media companies are reacting more boldly to changes in TV viewing behavior,” he said in a recent report.
Streaming crosses the generational divide
Millennials may have led the way in the adoption of streaming video as a main entertainment source. But now, streaming knows no age barriers. Nearly one-half (48%) of all U.S. consumers streamed television content daily or weekly in 2017, compared with just 37% the year before.
The younger the streamer, the more likely they would binge-watch video. Among Generation Z (ages 14-20), 91% said they binge-watch, compared to 86% of Millennials and 80% of Gen X (ages 35-51). On average, 75% of all consumers said they binge-watched. Mil- lennials watched the most episodes per binge-watching session: seven or more.
“Some hoped that as Millennials got older, they would settle down and watch pay-TV,” Jeff Loucks, executive director, Deloitte Center for Technology, Media and Telecommunications, said n a statement. “Instead, their Gen X parents are acting more like Millennials, using streaming services, watching TV shows, movies and sports on smartphones and binge watching.”
Plenty of American households pay for a traditional TV servoce every month. Nearly 92.2 million U.S. homes subscribe to pay-TV, down about 1.5 million subscribers from 2016, according to Leichtman Research Group. That includes more than 3.3 million subscribers to streaming pay-TV services DirecTV Now and Sling TV.
Still, “the pay-TV market saw net losses increase in 2017, and the continuation of a share shift from traditional services to newer Internet-delivered services,” the research firm’s president and principal analyst Bruce Leichtman said in a statement accompanying the recent report.