Subscription video on-demand (SVOD) services in the United States are expected to see better than 20% growth over the next five years, topping 277 million subscriptions by 2026, a new study reports. In 2021, subscriptions to OTT services are estimated at just less than 230 million.
Parks Associates also found that viewing time on mobile phones has more than doubled since 2015, with U.S. heads of broadband households (HH) saying about 25% of the video they consume is on mobile. Time spent watching on televisions, meanwhile, declined to 55% in 2021 from 67% in 2015. That means Americans are watching about 20.6 hours of video on TVs, and 9.4 hours on mobile devices.
That’s in line with data from Q1 2020 that showed streaming had become the most prevalent way to consume video in the U.S., as 76% of HH saying they subscribed to an OTT service, compared to just 72% that took a pay-TV service. By 2021, 82% of broadband HH subscribed to a streaming service and just 70% to pay TV.
Parks said more than nine-in-10 HH say they watch streaming content at least weekly. About 80% of Millennials and Gen Zers say they view video on more than one platform at least monthly.
According to the report, in Q1 2021, the average OTT subscription in U.S. broadband households was roughly 2.5 years. Subscriptions have a strong correlation with age, with subscription lengths for younger consumers being much shorter than for older consumers. Older consumers subscribe to fewer services but keep them longer. Younger consumers may subscribe to a larger number of services but are more likely to churn through them.
THE BOTTOM LINE
It’s no surprise that OTT subscription numbers continue to rise. Nor, that younger viewers are more likely to use smartphones and computers as their primary screens of choice.
And nobody should be surprised younger consumers churn more readily than older ones; that’s simply a habit that’s evolved for years. Younger viewers subscribe to a service long enough to binge a new series, or an event or to fill a short-term content void. Then, they cancel and often re-subscribe once there’s a new supply of content that appeals.
Services looking to reduce churn need to market more aggressively to subscribers, letting them know new content is coming. And, they need to have a service that delivers as good a product to a smartphone as to a connected TV. Those are the two screens moving forward that will be at the core of our viewing universe.