Traditional TV “Not Dead Yet” But Online Video Is Closing Fast: StudyLili | July 13, 2019 | 0 | Traditional
Though traditional TV still holds the most regard among entertainment consumers, it’s no longer dominant, a new study says. And new online-video services better make sure they’re regularly pumping out lots of original content if they want to attract and keep viewers.
The June study of 2,007 U.S. adult online users by Vorhaus Advisors, headed by former Magid Associates President Mike Vorhaus, and the digital group at big law firm Manatt, Phelps & Phillips found that half of U.S. adults watch online video daily. That number jumps to two-thirds for audiences in the core demographic of 18 to 34 years old.
Vorhaus presented the study’s findings onstage at VidCon, the giant influencer conference that opened Thursday in Anaheim.
“Half the country is watching online video every day,” Vorhaus said. “There’s a lot of online video being consumed; some estimate as much as couple of hours a day.”
When it comes to partaking of entertainment, only 43 percent of all those surveyed said television was their primary mode. That was the most of any option, but far from a majority.
Anticipating blowback from traditional TV loyalists in the crowd, Vorhaus said “TV’s not dying. Are we cool? TV’s not dying.”
But it is definitely less important than it used to be, especially among the young adults who are busy setting up households, starting careers, getting married, and having children.
“There’s still a lot of people using (TV),” Vorhaus said. “The average amount of time spent (watching TV) hasn’t gone down. But mobile is going to dominate the future.”
That’s because among 18-34s, the percentage relying on TV for their primary entertainment source dropped to less than one in five, at 19 percent, according to the study. Younger audiences were much more likely to use a smartphone or computer (a combined 49 percent) for their online video experiences.
“While television remains the leading platform for video viewership among all consumers, the smartphone is dominant among those 18-34, which bodes well for mobile-first content strategies,” said Ned Sherman, a Manatt partner and leader of its digital and technology transactions group. Sherman and his wife, Tinzar, also preside over a string of tech-, game- and entertainment-focused conferences around the country.
Importantly, some 11 percent of all those surveyed (and 14 percent of 18-34s) are “extremely likely” to cut the cord in the next year, according to the study. Another 10 percent (14 percent of the younger group) say they’re “somewhat likely” to cancel their service.
“I’ve never seen a number that high, and even if it’s half that number, it’s huge for these (cable-service) MSOs,” Vorhaus said. “This is happening; the traditional model is breaking down. It’s breaking down even further in the key demo of 18-34
For the subscription online services that would replace much of what traditional cable bundles provided, Sherman said unique content will be vital. Netflix now has nearly 150 million users and is pumping out hundreds of episodic series, shorts, and feature-length projects per year. The Disney+ and Apple TV+ services will launch this fall, and other major subscription services such as Quibi, HBO Max and a Comcast offering are expected next year.
“Our research made clear that unique content will continue to be a driver for user acquisition on SVOD services, which is expected to fuel investment in content as the streaming wars heat up,” Sherman said.
The average consumer pays for two services, most frequently Netflix and Amazon Prime, and are willing to pay for an average of about 1.6 more. That sets the stage for the coming streaming wars, because there are more major services vying for attention than average consumers say they’ll pay for.
With easy cancellations and lots of compelling programming on competing services, churn will be a major headache for service operators.
Sherman and Vorhaus said the study also found fast-rising interest in watching esports. Nearly 50 percent of younger survey participants said they were watching more esports now than they were six months ago. And almost as many said they expect to be watching even more esports six months from now.
While those viewers may still be doing other things, like sending a text message, during an esports match, Vorhaus said, they definitely aren’t also watching a traditional studio’s two-hour feature film. This shift in attention and core watch time has big implications throughout entertainment.
“In addition to the surge in online video viewership more generally, the market for esports is massive and an area that our team is deeply involved in as companies assess investment and M&A opportunities,” Sherman said. “We’ve represented some of the major players as well as negotiated team and player agreements for the top esports competitors in the industry, and this research reinforces that the market for this will only continue to grow.”