Today’s media landscape is vast, with the volume of streaming content continuously expanding as over-the-top (OTT) platforms add more content. In the US as of February 2022, consumers had 817,000 unique video titles across traditional TV and streaming services to choose from—a jump from 646,000 in December 2019 according to Gracenote.
This breadth has overwhelmed audiences, resulting in a shift in how consumers engage with video content and altering TV viewing. Nielsen’s first State of Play report gives marketers insight into why the video streaming landscape has reached a tipping point and how they can deliver on streaming’s bright future.
The report highlights two critical takeaways from the shift in how consumers interact with video and content: one, streaming is here to stay, and two, amid the explosion of new platforms, services and channels, there’s no blueprint for companies to secure their long-term loyalty or their own business growth.
Key takeaways from the report include:
- Consumers want the convenience of bundling (despite wanting to cut the cord from bundled cable not too long ago).
- 93 percent of consumers plan to keep or increase their video streaming services.
- 72 percent of consumers say “I love my user experience with video streaming services.”
- Marketers will need to have audience-first mindsets and leverage TV and streaming-specific segments to ensure they’re reaching and engaging their desired audiences.
- Buyers and sellers can tap into streaming-rich media planning tools to identify the incremental reach that streaming audiences bring to cross-platform campaigns to understand the full picture of who they are targeting.
- Three factors will drive future success: content, convenience and cost.
Nielsen says media companies will need to understand consumer behavior and sentiment to deliver what audiences are looking for—and keep them engaged as their choices increase. The audience will steer the future of the streaming landscape, and the media industry can help consumers in their media journeys by leveraging data to ensure they never get lost along the way.
Here’s a breakdown of the 817,000 unique program titles across linear TV and streaming services, according to Nielsen:
- Transactional VOD services (53 percent): A program example would be Yellowstone and platform examples would be Amazon, Apple TV and Google Play.
- SVOD non-exclusively (41 percent): A program example would be Friends and platform examples include HBO Max and syndicated TV.
- Free ad-supported VOD services (36 percent): A program example would be Revenge and a platform example would be The Roku Channel.
- Linear TV non-exclusively (24 percent): A program example would be Blue Bloods, and examples include CBS and many OTT platforms.
- Linear TV exclusively (16 percent): A program example would be Wheel of Fortune and a platform example would be ABC.
- SVOD exclusively (15 percent): A program example would be Stranger Things and a platform example would be Netflix.
To meet consumer behavior, streaming-first mindsets have become table stakes for content creators and distributors, notes the report. In the fall of last year, more than 81 percent of US homes had at least one TV-connected device, up from 72 percent back in 2019. And late last year, Americans two and older spent 32 percent of their total TV time with TV-connected devices (68 percent with traditional TV). Among kids 2-17, the percentage was 64 percent.
Audiences are loving the growing expanse. Last year, Americans watched nearly 15 million years’ worth of streaming video content, and streaming providers are steadily increasing their share of consumers’ total TV time. In February of this year, content from streaming platforms accounted for just under 29 percent of consumers’ total time with TV, ahead of broadcast programming (26.4 percent) for the fourth straight month.
While the TV set is still the dominant device for reach, the phrase “watching TV” has evolved over time. Today, it offers consumers a way to engage with any and all content, including audio. As Nielsen found, smart TVs are as popular for streaming music as smart speakers.
Devices consumers use for their paid audio streaming services:
- Smartphone (80 percent)
- Smart speaker (41 percent)
- Smart TV (41 percent)
- Computer (39 percent)
- Internet-connected device (37 percent)
- Tablet (31 percent)
- Connected car system (24 percent)
This growth and variety have inspired consumers to adopt more than two options as platforms emerge. Nielsen’s data shows the number of paid streaming services among paid video subscribers is:
- One service: 18 percent in 2022 vs. 35 percent in 2019
- Two services: 24 percent in 2022 vs. 33 percent in 2019
- Three services: 23 percent in 2022 vs. 21 percent in 2019
- Four services: 18 percent in 2022 vs. 8 percent in 2019
- Five services: 10 perfect in 2022 vs. 3 percent in 2019
- Six or more services: 7 percent in 2022 vs. none in 2019
Across age groups, consumers 35-49 spend the most money on streaming services, as 24 percent pay for five or more, Nielsen found. Consumers aren’t just replacing their traditional TV options with OTT options. In many cases, consumers continue adding to their media options when content appeals to them. Nielsen’s research shows they do this to a degree, largely because of cost: 56 percent of survey respondents say cost is the primary reason why they don’t subscribe to more services.
Nevertheless, the abundance of choices has survey respondents feeling overwhelmed. Nearly half (50 percent) say that the increase in options makes it hard to find what they’re looking for, which represents another consideration for marketers looking to acquire new customers.
This frustration has made 64 percent say they want streaming bundles, while only 9 percent disagree that there’s a need for bundled services.
Bundling traditional and streaming offerings, such as Xfinity and Apple TV, has become one solution to the industry’s growing awareness of consumers’ fatigue. Verizon plans to join soon as it announced its +play platform, which includes partnerships with Netflix, Peloton, Disney+ and other streamers. The service will allow customers to find, purchase and manage their go-to subscriptions at no extra cost.
But as Nielsen notes, bundling is just one way to help consumers find the content they’re looking for. Nielsen suggests applying hyper-detailed video descriptors to content catalogs as they crystalize the storylines and contextualize the essence of a show or movie.
Says the report:
“This data enables nuanced discovery paths and offers fresh and relevant program recommendations that are aligned with a viewer’s individual tastes and viewing history. In the streaming realm, the video carousel is the storefront. Visitors aren’t logging in to read. They’re logging in for visual experiences. And that’s where personalized images can enhance a platform’s visual merchandising.”
Across the streaming landscape, streaming video-on-demand (SVOD) options remain the biggest appeal, but ad-supported video-on-demand (AVOD), multichannel video programming distributors (MVPDs) and virtual MVPDs (vMVPDs) accounted for a combined 36 percent of total streaming minutes between July and December 2021.
vMVPDs—which enable consumers to access an array of VOD streaming content—live broadcast programming and cable sources have become increasingly popular as consumers tap into digital channels to access new content options. Over the past three years, vMVPD adoption has grown from 7.1 percent of all TV households to 12.5 percent, with YouTube TV, Hulu+ Live, DirecTV Stream and Sling TV steering much of the growth.
Ad-supported streaming options are also attracting more diverse audiences than traditional TV and SVOD options. For example, Pluto TV, Paramount’s ad-supported video service owned, attracts about twice as many black viewers as traditional linear TV (36 percent vs. 17 percent), according to Nielsen. Similarly, black audiences account for 39 percent of Tubi’s viewership (Tubi is Fox’s ad-supported streamer).