Just in case there was any doubt left, a fresh research report shows why it's imperative for cable operators and other pay-TV providers to incorporate OTT video services into their video offerings right away.
The report, issued Friday by Leichtman Research Group Inc. (LRG) , found that 57% of US households now subscribe to at least one of the nation's three leading Internet-based subscription video-on-demand (SVOD) services: Netflix, Hulu and Amazon Prime. Further, 30% of US homes subscribe to at least two of these services, and 13% take all three of them.
What's more, the Leichtman Research survey of 1,214 households revealed that nearly half of all US adults, or 48% of the population, now stream at least one of these services on a monthly basis. And more than a third of all adults, or 37%, now stream Netflix alone each week, up markedly from a mere 8% in 2010.
Most ominously for pay-TV providers, some 77% of 18-year-olds to 24-year-olds stream an SVOD service monthly, as opposed to just 23% of those over 55 years old. So the next group of potential pay-TV subscribers is by far the most likely demographic segment to go searching on the Internet for the video content they desire, instead of signing up for a traditional pay-TV bundle.
These numbers jibe with the results of other recent surveys about the still-surging popularity of OTT video services. In its latest research report on the subject, for instance, Parks Associates found that more than 60% of US broadband households now subscribe to at least one Internet streaming video service. In a related study, Parks also reported that US broadband households spent an average of $6.19 per month on the leading OTT video services in 2015, up from an average of $3.71 per month just three years earlier.
Taken all together, these numbers are more than enough evidence that conventional pay-TV providers are simply missing the boat if they can't find a way to integrate Netflix, Hulu, Amazon Prime and the rest into their existing programming lineups. Even if they introduce their own OTT services, as such pioneers as Dish Network LLC (Nasdaq: DISH), Comcast Corp. (Nasdaq: CMCSA, CMCSK), Charter Communications Inc. and Verizon Communications Inc. (NYSE: VZ) have begun to do, providers still risk losing both existing and potential customers if they don't offer the big SVOD services as well.
But here's even more evidence from the Leichtman study: Contrary to the popular notion that consumers are mainly streaming video to their tablets and mobile phones, the study found that a whopping 83% of Netflix users stream the service to their big TV screens at home.
In other words, consumers are mostly treating OTT video services like any other TV programming. Isn't it time that pay-TV operators did the same?
— Alan Breznick, Cable/Video Practice Leader, Light Reading