SVOD services continue to gobble up pay-TV subs in the U.S.

More research that shows the continuing adoption of SVOD services in the United States: 69% of all U.S. households now are subscribing to at least one over-the-top video service, up from just 52% in 2015. And, the survey counts just Netflix, Amazon Prime or Hulu, just more than 1% of the roughly 220 SVOD services available to U.S. consumers.

Increasingly, households have more than a single service, LRG found. About two-thirds (63%) have two or more, up from 38% in 2015.

As notable as the increase in multi-service households, how those services are being used is more telling.

As you’d expect, 18-34-year-old consumers remain the heaviest users of streaming services, with 52% saying they stream daily. But nearly one-third (31%) of Gen X and 11% of consumers over 55 also stream daily, a clear indication that this video revolution continues to expand.

The limited scope of the study – asking only about Netflix, Hulu and Amazon Prime, likely skewed these numbers lower than they actually are. Adoption of virtual Pay-TV services delivered over the Internet – YouTube TV, SlingTV, DirecTVNow, PlayStation Vue and the like – have seen remarkable growth over the past 18 months, as have services like CBS All Access, HBO and other content producer services. In fact, vMVPDs have been so successful that they’ve helped ameliorate the huge subscriber losses traditional pay-TV providers have seen over the same 18 months.

For example, DirecTVNow added 342,000 customers in Q2 and Sling gained 41,000.

By contrast:

Cable operators Comcast, Charter, Cox, Altice, Mediacom and Cable ONE lost 275,000 traditional subs;

Satellite operators DirecTV and Dish lost a combined 478,000 subs; and,

Telcos Verizon, AT&T and Frontier dropped 46,000 (despite a 23,000 gain by AT&T, it’s first positive quarter since 1Q2015).

That total, 1.08 million, added to Q12018 losses of 3.09 million, pushed 1H2018 losses to more than 4.17 million.

 vMVPD adds in Q12018 were significant at 1,599,000 with Q2 adds of 383,000, or a total of 1.98 million.

But for pay-TV operators to survive – let alone thrive – in this charging marketplace, they’ll have to reach disaffected customers with services that better reflect what consumers have become enamored with: Plans that are flexible, demand no penalty for churning, that are available anywhere on any screen (LRG points out that nearly half – about 46% – of adults watch on devices other than TV screens, something we’ve consistently reported on in our quarterly Video Index reports) and that offer relevant content with no delay.

Currently, according to LRG, some 53% of TV households also get at least one SVOD service, and just 25% only get a pay-TV service (compared to 16% who only get Netflix, Hulu or Amazon Prime).

There’s little doubt SVOD subscriber numbers will trend higher – at the expense of legacy pay-TV providers, prompting those legacy providers to lean more heavily on their broadband – and eventually, mobile – services.

But that’s another story.

Stay tuned.

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