Video Streaming Behaviors: Synopsis
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- Melvin Jackson
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2 Contents Synopsis... 3 Key Takeaways... 4 Behaviors Of Video Streaming SVOD Penetration...6 Video Streamer Quintiles Video Streamer Profile Device Access...12 TV Streaming...13 Time Spent By Device...14 TV Everywhere...15 Streaming Video Type Usage...16 Advertising Sentiment Why Subscribe?...18 Why Cancel?...19 Price Sensitivities Password Sharing...21 The Future?...22 Binge-Viewing Key Behavioral Comparisons of Video Streaming Time Spent Per Day Comparative Churn Rates Part Three: Sneak Peek Contact Us... 33
3 SYNOPSIS Video Streaming Behaviors: Synopsis Part two in a three-part series on video streaming, Requiem For A Stream: Video Streaming Behaviors, examines the penetration and usage of streamers then delves into behavioral insights that cover the who, what, where, why and how of streaming Video streaming has, no doubt, become very popular in today s society, especially as subscription-based services now equal the penetration of DVRs However, even as penetration continues to grow and more people access more services, a large majority of overall streaming activity is still concentrated among a finite group of super consumer streamers Streamers, almost half of which are Millennials, are price conscious, have an insatiable thirst for quality content and, while constantly connected and always on the go, prefer to watch their programming in one place, more often now the new living room There is another pronounced behavior that is seen from their consumption patterns: Streamers Have a Clear Preference For TV Network Content & Are Much More Likely To Binge-Watch This Type Of Programming Than Any Other REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 3
4 KEY TAKEAWAYS Six Key Takeaways About Video Streaming Behaviors The top reason why people initially subscribe to their favorite streaming service is to get more premium content to augment their existing pay-tv subscription This beat out exclusive content access like House of Cards by almost three times Going beyond just SVOD services, people prefer TV online programming over other types of streaming video such as amateur and original digital video (ad-supported) Furthermore, TV online delivers a much better viewing experience than other types of adsupported video which, in turn, makes its advertising more memorable to viewers In terms of binging, people are much more likely to binge TV network shows, both past and present, than original series from streaming services From a video viewing perspective, over an hour more of time spent per day is with Ad-Supported TV than with any SVOD service SVOD services also typically have a much higher annual churn rate than MVPDs, which is another proof point that shows the higher level of loyalty consumers have to TV brands REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 4
5 Behaviors Of Video Streaming
6 SVOD PENETRATION SVOD Has Reached Critical Mass In TV Households While DVR penetration has plateaued recently, SVOD penetration has steadily grown and is now at 50% of the household population with almost 30% of households having both a DVR or SVOD access 49% 49% 50% 49% 50% 50% 50% 48% 45% 46% 41% 42% 4Q '14 1Q '15 2Q '15 3Q '15 4Q '15 1Q '16 DVR SVOD Source: Nielsen Total Audience Report, 1Q 16 REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 6
7 VIDEO STREAMER QUINTILES A Small Fraction Of Streamers Account For The Large Majority Of Overall Streaming Activity 20% of the streaming population account for 87% of total video streaming time Video Streamers Quintile Analysis 20% 0% 2% 9% 20% Quintile 1 (Heaviest) 20% 20% 87% Quintile 2 Quintile 3 Quintile 4 Quintile 5 (Lowest) 20% % of Streaming Pop % of Total Streaming Minutes Source: Nielsen Total Audience Report, Q1 16; based on cross-platform homes ranked by in-home streaming behavior. 1/1/16-3/31/16 via Nielsen NPOWER/Cross-Platform Homes Panel for P2+. Streaming based on home PC only. Chart based on average daily minutes REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 7
8 VIDEO STREAMER QUINTILES Even With Very Solid Penetration Growth, Streaming Continues To Be Highly Concentrated Among The Heaviest Subset Although streaming penetration has grown with seemingly endless content and device options, the activity is still very much concentrated within the heaviest 20% of streamers Heaviest Streamers (Quintile 1) % of Total Streaming Time 84% 85% 86% 88% 87% 1Q'12 1Q'13 1Q'14 1Q'15 1Q'16 Source: Nielsen Total Audience Report, Q1 16; based on cross-platform homes ranked by in-home streaming behavior. 1/1/16-3/31/16 via Nielsen NPOWER/Cross-Platform Homes Panel for P2+. Streaming based on home PC only. Chart based on average daily minutes REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 8
9 VIDEO STREAMER QUINTILES The Concentration Of Usage In The Top Quintile (20%) Is Much Heavier For Streaming Than It Is For Other Media % of Usage Contributed By The Top 20% of Users 52% 48% 24% 13% 17% 48% 52% 76% 87% 83% AM/FM Radio TV (incl DVR) Internet on a PC Stream on a PC Smartphone Video Top 20% of Users Bottom 80% of Users Source: Nielsen Total Audience Report, Q1 16. TV-connected devices include DVD, video game & multimedia devices while Internet on a PC and Stream on a PC reflects in-home usage. REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 9
10 VIDEO STREAMER QUINTILES Total Streaming Is Even More Concentrated When Factored Against The Overall TV Population 6% of The U.S. TV population account for 87% of total video streaming time Video Streamers Quintile Analysis 15% 0% 2% 9% 52% 87% Quintile 1 (Heaviest) Quintile 2 Quintile 3 Quintile 4 6% 6% 6% 6% 6% % of U.S. TV Pop % of Total Streaming Minutes Quintile 5 (Lowest) Non-Streamers (Internet Homes) TV Users (Non-Internet Homes) Source: VAB analysis of overall U.S. TV population data coupled with Nielsen Total Audience Report, Q1 16, data on cross-platform homes ranked by in-home streaming behavior. 1/1/16-3/31/16 via Nielsen NPOWER/Cross-Platform Homes Panel for P2+. Streaming based on home PC only. Chart based on average daily minutes REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 10
11 VIDEO STREAMER PROFILE So Who Is Streaming Video? Millennials Make Up Almost Half of Streamers Streamers skew higher income, educated Millennials and over index against both single and children in the household Streaming Services Launch Period A % A65+ 5% A % $200K+ 8% Less Than $30K 14% A % Age A % (157 index) $75K+ HHI 54% (125 index) $100K-$200K 30% HHI $30K-$50K 14% A % A % Post-Graduate Degree 13% Didn't Graduate High School 7% $75K+$100K 16% $50K-$75K 18% Black 11% Other 1% High School Graduate 23% Hispanic 17% Bachelor s Degree Plus 37% (126 index) Bachelor's Degree 24% Education Asian 5% Ethnicity Associate Degree 11% Some College 22% Native American 1% White, Non-Hispanic 67% Source: 2016 GfK MRI Spring, I used a streaming video service in the last 30 days (includes Amazon Prime Instant Video, Crackle, Google Play, Hulu, itunes, Netflix, Sling TV). Indices against A18+. REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 11
12 DEVICE ACCESS In Terms Of Accessing Streaming Content, People Are Increasingly Relying On Their Connected TVs As smart TV and streaming media players penetration grows, device usage is beginning to evolve primarily from mobile over to the TV screen in the living room. Studies have shown that, given a choice, most people would select the biggest screen at their disposal to watch. They want to watch content on the TV and, as a result, consumers have come to expect the same quality, availability and experience as their pay TV service Which Device Do You Use Most Often to Watch Your Streaming Service? 12% 15% Smartphone Tablet 10% Laptop Desktop 43% 15% Connected TV Game Console 5% Source: IBM Cloud (Clearleap), online survey of 1,007 US adult SVOD users, April Source: Activate study in conjunction with comscore, Deloitte, Verizon Digital Media Services and Activate analysis - Device preference for watching TV series - TV : 60% Millennials, 79% Gen X, 86% Boomer REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 12
13 TV STREAMING In This New Living Room, Consumers Have Several Choices On How They Stream Over Their Connected TV In a recent Magid research study, 74% of respondents connect a TV to the internet to stream content; up from 59% the prior year Usage of internet streaming devices and smart TVs have become much more prevalent recently Methods Used For Streaming Video To A TV A video game console 30% 33% Internet streaming device 20% 31% A smart TV 16% 26% A Blu-ray disc player 18% 22% A computer connected to the TV 17% 22% 2016 TiVo 3% 4% 2015 Source: Magid The State of Video Entertainment in the U.S. Online survey with 1,600 U.S. online consumers ages 8+, March 4-14, 2016 REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 13
14 TIME SPENT BY DEVICE Beyond TVs, Time Spent For Most Connected Devices Is Increasing Following Along With The Surge In Penetration Average Time Spent Per Day By Device (hh:mm) Based on Total A18+ U.S. Population 16 vs. 14 Diff% 0:05 0:14 2:15 0:12 0:10 2:41 0:14 0:09 0:09 0:48 3:43 0:14 0:13 0:08 0:58 +68% +17% +160% -20% +18% 0:49 1: % 1:02 0:47 0:12 0:19 0:31 Q Q Q % Tablet Smartphone Internet on PC DVD Multimedia Device Video Game Console *Note: reflects any usage by device, not just video consumption; tablet & smartphone includes both app/web Nielsen Total Audience Report, Q1 2016; multimedia device includes viewing on a Apple TV, Roku, Chromecast, smartphone, computer/laptop, etc connected to the TV REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 14
15 TV EVERYWHERE Streaming, Even For TV Everywhere, Is Becoming More Stationery Regardless Of On The Go Device Availability Most TV Everywhere viewing occurs in one location even on mobile TV Everywhere Right Here: Interestingly enough, 71% of TVE viewers overall watch content from one location; the device doesn t much matter either as 72% of mobile TVE viewers watch from one location TV Everywhere Users By Location 71% 17% 6% 6% TV Everywhere IOS & Android Users By Location 72% 16% 6% 6% 1 Location 2 Locations 3 Locations 4+ Location Source: Adobe Primetime, Adobe Digital Index, Digital Video Benchmark Report Q REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 15
16 STREAMING VIDEO TYPE USAGE People Prefer TV Online Programming Over Other Types Of Ad-Supported Streaming Video Usage of Streaming Video Types Adults 18+ TV Online Amateur Original Digital Video (ODV) 23% 20% 16% 10% 7% 4% At Least Weekly Daily Additionally, over half of Millennials stated they streamed TV Online at least monthly which bested both Amateur (47%) and ODV (40%) according to the 2016 IAB Original Digital Video Consumer Study Source: Gfk 2016 IAB 2016 Original Digital Video Consumer Study April Q: Have you ever watched any of the following original digital video shows or visited their sites below? TV Online- Network TV shows online, e.g. Pretty Little Liars, Walking Dead; Amateur- created by regular people; looks and feels home made; Original Digital Video- professionally produced video only for ad-supported online distribution and viewing (not TV). Those who only watch non-ad supported ODV (Netflix, Amazon) were not included. REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 16
17 ADVERTISING SENTIMENT TV Online Also Delivers A Much Better Viewing Experience Which Makes Its Advertising More Memorable 78% of respondents in the 2016 IAB Original Video Consumer Study said that they were very / somewhat satisfied with the experience of watching TV Online, which also bested ODV (73%) and Amateur (68%) Advertising Statement Association Monthly+ Users of Video Type 45% 39% 38% 29% 31% 27% I tend to remember ads the most in this type of online video I tend to notice ads most in this type of online video TV Online Amateur Original Digital Video (ODV) Source: Gfk 2016, IAB 2016 Original Digital Video Consumer Study, April Q: Which type of online viewing listed best matches each statement? TV Online- Network TV shows online, e.g. Pretty Little Liars, Walking Dead; Amateur- created by regular people; looks and feels home made; Original Digital Video- professionally produced video only for ad-supported online distribution and viewing (not TV). Those who only watch non-ad supported ODV (Netflix, Amazon) were not included. REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 17
18 WHY SUBSCRIBE? When It Comes To SVOD Services, People Subscribe Because They Have An Insatiable Thirst For Quality Video Content 38% of SVOD users simply can t get enough TV & movies and they typically add an SVOD service to augment their existing pay-tv subscription That s almost three times the amount who subscribe to an SVOD service for access to exclusive shows like House of Cards or The Man in the High Castle Why Did You Initially Subscribe to Your Favorite Streaming Service? More Content 38% Exclusive Content Came with Another Service Cable Replacement Portability Cable Substitute 14% 12% 11% 11% 14% Cable replacement accounts for only 12% of respondents Source: IBM Cloud (Clearleap), online survey of 1,007 US adult SVOD users, April 2016 REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 18
19 WHY CANCEL? However, They Will Consider Cancelling A SVOD Service If They Serve Too Many Ads Or Become Too Expensive Since most SVOD services do not currently serve ads, or have very limited ad loads, the cost equation is the more relevant, big issue at this point Which of These Issues Are Most Likely to Make You Cancel a Subscription to a Streaming Service? Too Many Ads 27% Too Expensive 25% 2+ Streams at a Time Not Supported 20% Technical Problems 17% Not Enough Shows 4% Not Available Outside U.S. 3% Can't Share Login 3% Source: IBM Cloud (Clearleap), online survey of 1,007 US adult SVOD users, April 2016 REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 19
20 PRICE SENSITIVITIES Price Sensitivity Is Very Important To Consumers In The SVOD Category According to a GfK study, Netflix, Amazon Prime and Hulu are already priced close to the maximum that users would pay ($10 - $11 per month) Maximum Willing To Pay Per Month (among users of each service) $10.38 $10.82 $7.83 $9.10 $9.83 $ $3.06 $1.69 Netflix Amazon Instant Video Hulu (Pay) YouTube Current standard SVOD base packages $ $11.99 $ $10.99 $ $11.99 $9.99 A recent illustration of just how important price sensitivity is comes from Netflix s 2Q 16 earnings report, where they reported a net gain of 160K subs (vs. 500K pre-earnings estimate) after ungrandfathering long-time subscribers and raising their rate to what new subscribers pay. This was the lowest quarterly growth rate in over two years Furthermore, Normura Securities estimated that Netflix would lose 480,000 subscribers based on ungrandfathering Source: GfK Comparing Streaming Services 2014 & 2016, GfK US Basis: April ,002 and March ,007 US consumers, users of streaming video, aged 13-64, interviewed online REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 20
21 PASSWORD SHARING People Are So Price Sensitive That A Large Portion Of Subscribers Share Their Password With Others, Mostly Family Members More than half of the respondents in an IBM Cloud survey (52%) said that they either shared their password with someone or they used someone else s password Furthermore, 27% of respondents said they borrowed a password to try a service before they subscribed Overall, just over 4% share their password outside the family circle Amazon Prime members are more reluctant to share their password (62% don t), mostly because sharing an Amazon Prime password provides access to all the shopping benefits including one-click purchasing Do You Share the Password for the Streaming Service You Pay for With Anyone Else? No, Don't Share 48% Yes, With Family 42% Use Someone Else's 6% Yes, With Friends 2% Yes, With Roommate 1% Yes, With Anyone 1% Due in large part to password sharing, 30% of Millennials say that someone else actually pays for their SVOD service Source: IBM Cloud (Clearleap), online survey of 1,007 US adult SVOD users, April 2016 REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 21
22 THE FUTURE? With Various Factors In Play, One May Wonder If SVOD-Only Services Will Be Compelled To Offer An Ad-Supported Option In The Future? With the market coming closer to a saturation point $5,496.4 $3,674.5 Online SVOD & Online Transactional VOD Revenue Projections Online Video Subscription Services $6,976.6 $8,540.0 $9,923.1 $10,904.0 $11,616.0 $12,102.9 Online Transactional $9,580.7 $9,170.8 $8,544.2 $7,651.8 $6,371.0 $4,964.0 $12,437.5 $9,839.9 $1,821.9 $2,012.6 $2,169.0 $2,271.3 $2,359.8 $2,445.2 $2,522.2 $2, and subscription pricing already close to consumers threshold Maximum Willing To Pay Per Month (among users of each service) 2014 $10.38 $10.82 $7.83 $9.10 $9.83 $ $1.69 $3.06 Netflix Amazon Instant Video Hulu (Pay) YouTube Current standard SVOD base packages $ $11.99 $ $10.99 $ $11.99 $9.99 will aggressive revenue goals force SVOD-only services to offer an ad-supported option down the road, in addition to their subscription packages, as they look to retain viewers and search for additional revenue streams? REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 22
23 Pressing Pause To Talk About The Ubiquitous Streaming Behavior That Actually Started Well Before The Digital Age
24 BINGE-VIEWING The Concept Of Binge-Viewing Originated On Television in the 1980 s With Primetime & Weekend Program Marathons 1980 s 1990 s 2000 s 2010 s REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 24
25 BINGE-VIEWING In This Era Of On-Demand Accessibility, It s No Surprise That Binging Would Continue To Be A Pronounced Viewing Behavior According to GfK MRI research, 57% of TV viewers say they have regularly watched three or more episodes of the same show in one sitting whether that be via streaming, DVR, VOD or TV marathons 14%: usually binge all or most of the time 18%: frequently binge more than half the time 25%: sometimes binge about half the time In terms of how these regular bingers view their content: 66% say streaming is the binge viewing option they use most 19% rely on traditional TV marathons 22% say DVRs are their main source of regular binge viewing These regular bingers are mainly watching network TV shows, both past and present, regardless of the device or service they re using for access What Are Regular Bingers Mostly Watching? TV Shows They Have Never Seen 41% "Old Favorite" Programs 35% Original Shows From Streaming Services 22% Source: GfK MRI, July 2016 REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 25
26 BINGE-VIEWING However, In This Environment Of Abundant & Available Content, There Are Signs Of Binging Hitting A Saturation Point According to Forrester Research, the % of younger millennials and Gen X-ers who binge watch TV has decreased recently along with the number of times they engage in it per month % Who Binge Watched At Least Once In Past Month Binge Sessions Per Month 78% 74% 63% 54% Younger Millennials (A18-26) Gen-Xers (A36-49) Younger Millennials (A18-26) Gen-Xers (A36-49) Source: Forrester Research (released April 2016) based on 3,119 US online adults (18-59) in May 2015 and 3,188 US online adults (18-58) in 2014 who watch video in a typical month. Also surveyed 1,961 US online adults (18-59) who binge watched in the past month. REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 26
27 Key Behavioral Comparisons Of Video Streaming
28 TIME SPENT PER DAY Subscribers Spend More Time With Netflix Than Any Other SVOD Service But It s Still Well Behind Television People spend more time directly with TV brands than with any streaming service, a gap that widens even further when TV Everywhere is included 3:38 Time Spent Per Day: TV & Streaming Services (among users of each service, P13-64, hr:min) 2:05 0:52 1:21 1:13 Ad-Supported TV Netflix Amazon Instant Video Hulu TV Everywhere Source: GfK Comparing Streaming Services 2014 & 2016, GfK US Basis: March ,007 US consumers, users of streaming video, aged 13-64, interviewed online. Nielsen R&F Time Period Report, Live+7, March 1-31, 2016, P13-64 REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 28
29 COMPARATIVE CHURN RATES SVOD Services Have A Much Higher Churn Rate Than MVPDs According to an IBM Cloud survey, 31% of respondents have cancelled a streaming service subscription at some point. Furthermore, research from Parks Associates in 2015 shows that approximately 20% of U.S. broadband HHs had cancelled at least one OTT service in the past 12 months Of course, respondents may have re-subscribed at a later date or subscribed to another service There are several reasons that people don t renew or cancel their SVOD service including trial period expirations: not updating new credit card billing information and seasonal streaming (subscribing to watch a show or event then canceling when done) which all create significant churn % of U.S. Broadband HHs Who Have Cancelled A Video Subscription In past 12 months 5% 5% 7% 3% 1.5% Netflix Amazon Hulu Other SVOD MVPD % of 2015 Subscriber Base +9% +19% +49% +60% +1.5% With binge-viewing being a popular behavior, where Netflix says it takes an average of five days for people to view one season of their favorite shows, it s vital for SVOD services to continue acquiring or producing content in order to replenish their libraries and keep their offerings fresh Source: IBM Cloud (Clearleap), online survey of 1,007 US adult SVOD users, April Parks Associates 2015 OTT Video Market Tracker. VAB estimate based on analysis of multichannel HH OTT substitute data from SNL Kagan REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 29
30 In Part Three Of Our Requiem For A Stream Series Coming Soon, We Examine How Streaming Has Impacted The Ad-Supported TV Environment Here s A Little Of What You Can Expect
31 PART THREE: SNEAK PEEK The Heaviest Video Streamers Watch Nearly As Much Television As All Other Streamers These super video consumers that identify as the heaviest streamers only watch 6% less TV than the lightest streamers and actually watch 11% more TV than the non-streamers within internet homes Television Consumption Among Video Streamers Quintile Analysis 4:16 4:30 4:24 4:38 4:33 3:51 Quintile 1 (Heaviest) Quintile 2 Quintile 3 Quintile 4 Quintile 5 (Lowest) Hrs:Min ( Avg Day) Non-Streamers (Internet Homes) Source: VAB analysis of Nielsen Total Audience Report, Q1 16; based on cross-platform homes ranked by in-home streaming behavior. 1/1/16-3/31/16 via Nielsen NPOWER/Cross-Platform Homes Panel for P2+. Streaming based on home PC only. Chart based on average daily minutes REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 31
32 PART THREE: SNEAK PEEK Ad-Supported TV Reach Has Remained Stable During SVOD s Period Of Steady Growth Monthly TV Cume Reach vs. Streaming Services Used At Least Once A Month To View TV Programs / Movies (among P13-64 general population) 92% 91% % 33% 7% 13% 10% 12% 13% 13% Ad-Supported TV NETFLIX Amazon Instant Video HULU TV Everywhere Source: VAB Analysis of Nielsen R&F Time Period Report, Live+7, Total Day, March 1-31, 2014 & 2016, P13-64 (reach based on P13-64 total pop) for ad-supported TV. GfK Comparing Streaming Services 2014 & 2016, GfK US Basis: April ,002 and March ,007 US consumers, users of streaming video, aged 13-64, interviewed online. REQUIEM FOR A STREAM: VIDEO STREAMING BEHAVIORS 32
33 CONTACT US For More Information Visit Us Online TheVAB.com Follow Like us: facebook.com/videoadvertisingbureau Sean Cunningham President & CEO Danielle DeLauro SVP Strategic Sales Insights Jason Wiese VP Strategic Insights Evelyn Skurkovich VP Strategic Research & Insights
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