Pay TV seeing on-demand viewing bump during COVID-19 pandemic

pay tv

US pay TV is seeing an increase in the amount of on-demand content being consumed during the COVID-19 pandemic, research shows.

About three-quarters of adult broadband users with a pay-TV service watch shows and movies via the service’s on-demand feature, research from TDG shows. And 60% of those users say they are spending more time watching on-demand programming because of stay-at-home edicts during the COVID-19 pandemic. About one-fifth of users say they’ve increased on-demand viewing significantly. 

The late April survey of 1,997 U.S. adults with a broadband data service in their homes also found that younger viewers were almost twice as likely to report significant increases in on-demand viewing. Twenty-three percent of respondents 18-45 years old reported watching significantly more compared to just 13% for those above 45.

TDG also found virtual pay-TV services saw slightly higher numbers for increased on-demand usage (21% compared to 19%) with just 13% of consumers who use a satellite pay-TV service reporting a significant increase in on-demand viewing.

Consumers in the Midwest showed the smallest increase (16%), compared to 18% in the South, 19% in the Northeast and 23% in the Western US.

For pay TV, a tale of two realities

Pay-TV services are experiencing a surge in viewing and, at the same time, they’re experiencing their biggest subscriber losses ever. As the economy continues to compress, those losses are likely to accelerate.

A survey of advertisers earlier this month found that they plan to spend just two-thirds this year of what they usually do in upfronts, at least a $7 billion reduction in ad spend. With production still on hold and the future of televised sports still up in the air, many brands are worried about committing to long-term deal, according to Adweek.

That’s more bad news for pay-TV providers, who’ve seen their own local ad revenue decline, starting at the end of the first quarter with every operator expressing concern about following quarters in their Q1 earnings calls.

The bottom line

Increasingly, operators are looking to OTT, not TV Everywhere, as their future.

As Comcast Group Chief Executive Jeremy Darroch said during Comcast’s earnings call when asked about Sky’s OTT said: “It will form a bigger part of our mix. It’s another string to our bow, if you like. …We can push hard on OTT, all of our streaming services. We’re already providing Sky Q directly over fiber in Italy. And all of these provide us with good alternatives and different ways to get to customers in this environment.

The big winners moving forward, obviously are streaming services, particularly subscription services that offer an array of titles at a cost significantly less than pay-TV services charge.

Stay tuned and stay well.

Jim O’Neill is Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn