Research into TV viewing from several sources suggests ongoing changes in device and service preferences. Connected TV devices are on the upswing, and traditional pay TV services are continuing their years-long decline.
According to the Leichtman Research Group, 69% of U.S. TV households have at least one TV set connected to the Internet via a smart TV set, a stand-alone device (like Roku, Chromecast, Amazon Fire TV stick or set-top box, or Apple TV), a video game system, and/or a Blu-ray player - up from 50% in 2014 and 24% in 2010.
Overall, there are more connected TV devices in U.S. households than there are pay TV set-top boxes. Among those with any connected TV devices, 76% have more than one device, with a mean of 3.5 per connected TV household. Across all households (including those that do not have any of these), the mean number of connected TV devices per household is 2.4, while the mean number of pay TV set-top boxes per household is 1.7.
The findings are based on a survey of 1,204 TV households throughout the United States, and are part of a new LRG study, "Connected and HD TVs XIV." This is LRG's 14th such annual study.
Other findings indicate:
Overall, 25% of adults in U.S. TV households watch video via a connected TV device daily, compared to 11% in 2014 and 1% in 2010.
43% of all ages 18-34 watch video via a connected TV device daily, compared to 26% of ages 35-54 and 10% of ages 55+.
22% of adults with a pay TV service watch video via a connected TV device daily, compared to 38% of pay TV non-subscribers.
79% of all TV sets in U.S. households are HDTVs, an increase from 59% in 2014 and 11% in 2007.
38% of non-4K UltraHD TV owners have seen one in use, up from 10% in 2014.
31% of those who have seen a 4K HDTV in use are interested in getting one, compared to 7% of those who have not seen a 4K HDTV.
"Connected TV devices continue to expand both in terms of the percentage of U.S. households that have connected TV devices and the frequency that people are using them," said Bruce Leichtman, president and principal analyst for LRG. "Yet with 81% of connected TV households also getting a pay TV service, choices provided by connected TVs are generally being integrated with traditional viewing options."
On a related note, Adobe's (NASDAQ:ADBE) "State of Digital Video" report indicates that connected TV devices are starting to displace mobile devices as the preferred device for watching video. The report is based on data from more than 4 billion TV Everywhere (TVE) authentications in North America and more than 300 sites and apps.
The company says TV connected devices (TVCDs) now comprise 32% of TVE consumption, up from 20% two years ago and surpassing browsers. Watching TVE via TVCDs grew 349% over past two years and is the only segment where growth is accelerating year over year.
In contrast, the mobile share of viewing dropped below 50% for the first January in TVE history (54% to 46% since Jan 2015). While mobile is the device of choice during the day and primetime, consumers are turning to TVCDs in the evening, Adobe says. Combined, the two account for more than 75% of all video starts. Weekdays account for 64% of video starts. During the week, half of all TVE activity is in the evening and primetime slots (peaking at 9pm)
While connected TV device viewing is on the rise, traditional pay TV is continuing to slide.
According to the Diffusion Group, 22% of U.S. broadband households do not use traditional pay TV services. In 2011, 9% of the 85 million U.S. broadband households qualified as Cord Nils (literally no use of TV services from cable, satellite, or telco TV providers). At year-end 2016, the number of U.S. broadband households topped 100 million, with 22% qualifying as Cord Nils. The number of broadband households living without traditional pay TV has grown from just under 8 million in 2011 to 22 million by year-end 2016, an increase of 156% since 2011 and 22% in the last year.
While this should not be news to traditional pay TV operators, Greeson says the extent of the disruption has been largely overlooked. Consequently, the majority of MVPDs are being forced to rely on ARPU-killing ‘skinny’ TV services to save their dual-service relationships. Comcast (NASDAQ:CMCSA) is the exception to the rule, as it invested early in IP-enabled set-top boxes and features, a strategy from which it has greatly benefited (and is expected to continue to). Unfortunately for other U.S. MVPDs, the stickiness of the Internet/TV bundle appears to be in decline, even before broadband pay TV services gain serious footing.
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