Availability of premium content online and a wider range of OTT options, not price, are accelerating cord cutting among American consumers, a new report posits.
And, according to Limelight’s latest State of Online Video report, 69% of consumers now subscribe to at least one OTT service, up 10% from a year ago. A whopping 80% of Millennials have at least one SVOD service and report watching at least seven hours of online video each week.
While Limelight found computers and laptops are the dominant devices for watching online video, smartphones are rapidly gaining ground.
For Millennials, the smartphone is the most popular device for watching online video.
“Our research continues to show increasing adoption of OTT content, especially among younger consumers,” said Nigel Burmeister, vice president of global marketing at Limelight Networks. “Traditional providers and delivery models are increasingly at risk of being left behind as consumers become more savvy.”
Rising prices from pay-TV providers was cited by 29% of respondents to Limelight’s survey as a primary reason to cut the cord. But that’s down 8% in the past year.
A la carte programming continues to interest consumers with 20% saying they want to be able to directly subscribe to the channels they want online, a 4% increase from a year ago.
Millennials are even more interested in a la carte, and are 7% more likely to shift viewing to OTT content and cancel pay-TV subscriptions when they can subscribe to channels directly.
Other findings include:
- Video quality is becoming increasingly important. Consumers continue to report buffering to be the most frustrating part of watching online video, but poor video quality is starting to close the gap.
- YouTube’s decline may signal an interest in higher quality online content. TV shows and movies remain the most watched type of online video, with original content/YouTube demonstrating a steady decline since the last study. Millennials in particular are watching less YouTube in favor of OTT services.
- Advertising in online video is becoming more accepted. Respondents are increasingly fine with online video ads – particularly if it allows them to access content for free. Interestingly, Millennials are the most accepting of advertisements.
- Across all social media channels, Millennials share dramatically more video than their generational counterparts with Facebook continuing as the channel of choice for all generations.