Subscription, on-demand video services hit important milestone (but Live TV viewing is still King)

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June 27, 2016 by Paul Dughi

Video on demand VOD service on TV.

You may not have heard the term OTT before.  It means “over-the-top” delivery of video programming – through a set-top box or internet-connected TV.  But I’ll bet you know some of the products and have even used them.

Netflix, Amazon Prime, and Hulu are OTT products and the news today is that the number of people using these digital subscriptions for on-demand videos has hit a magic number:  50% of US TV households now have access, according to the Nielsen ratings folks.

50% has been a historic rule-of-thumb, representing a point when more than half the population can now be influenced by it. When cable TV reached 50% penetration in the mid-1980s, that’s when Madison Avenue began taking it seriously as an advertising medium. – MediaPost

Remember when VHS, DVD, or DVRs hit the market?  It was supposed to shake things up and undermine television and cable viewing.  While it did make an impact, it shifted video viewing from one platform to another while the hours-per-day people viewed television continued to increase.  That’s continuing to happen.

This could change the landscape a bit though as most of these services (Netflix, Amazon Prime) are advertising free.

Nielsen says these subscription video on-demand services (which they call SVOD) have the same reach as DVRs.

“Close to 30% of homes have a both DVR and access to SVOD — up nearly 20% from last year – Nielsen

Media consumption continues to rise

Total media consumption continues to rise.  The more options available and the ease of access due to mobile and internet-delivery of video have expanded what people view.

I’ll bet you didn’t know you’re accessing one hour more media a day than you were last year at this time.  Nielsen says that’s how big of a jump in media consumption was made.  On average, adults spent 10 hours and 39 minutes with media… every day!  Smartphones had the biggest jump in usage to 37 minutes (up 60%).

Live TV still most dominant media consumed

Live TV

Nielsen 1Q 2016 Media Usage Report

Although usage dropped by 1%, Live TV is still the biggest medium – by a longshot. On average, adults spent 4 hours, 31 minutes consuming Live TV.

Live TV is more than double the nearest medium (radio) and more than Smart Phones, Computer, Tablets, DVRs, Video Game Consoles, Multimedia Devices, and DVDs – combined.

 

 

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