The pay-TV and subscription video on-demand (SVOD) markets continue to move in opposite directions, to the point where the number of households with SVOD services has reached near-parity with those who subscribe to pay-TV services. So finds research from the Leichtman Research Group (LRG).
Three-quarters (74%) of US households surveyed in late 2019 reported having at least one SVOD service such as Netflix, Amazon Prime or Hulu, up from 64% in 2017. The majority of SVOD households don’t just stop at a single service, with fully 69% reporting they subscribe to more than one SVOD service.
While 75% of households subscribed to some form of live pay-TV service in 2019, that figure has decreased from 87% a decade earlier.
In most cases, having an SVOD or pay-TV subscription is not an either/or proposition. Indeed, per LRG’s data, more than half (54%) of TV households have both services. This is up just slightly from last year when LRG reported that 53% of households had both pay-TV and SVOD services.
About one-fifth (21%) of US TV households are exclusively pay-TV customers, while about an equal proportion (20%) restrict their subscription to SVOD.
No Surprises: The Age Factor
As expected, there’s a strong age gap in the usage of SVOD services. Half (51%) of viewers between the ages of 18-34 and 34% of 35-54-year-olds stream an SVOD service on a daily basis, while only 15% of viewers 55 years old and older stream with that frequency.
Similarly, Marketing Chart’s latest US Media Audience Demographics report found that adults are about as likely to watch TV programs online as they are on pay-TV. However, when broken down by age, younger audiences (18-44-year-olds) are more likely to watch online than through pay-TV services.
Additionally, the MarketingCharts report shows that while adults 45 years-old and older account for about one-third (32% share) of online monthly TV program viewers, they constitute the majority of the cable TV (59% share) and broadcast TV (61% share) weekly viewing audience.
Broadband Subscriptions Increase
The shift to viewing TV shows online has been enabled by the penetration of broadband services in US homes with internet service. Indeed, LRG research indicates that the majority (85%) of US households get internet service at home, with broadband accounting for 96% of those households.
The number of homes with broadband subscriptions is also growing: the largest US cable and telephone providers (representing 96% of the market) acquired an additional 605,000 net broadband subscribers in Q3 2019, per LRG, surpassing 100 million subscribers for the first time.
By contrast, cord-cutting continues. LRG reports that the largest pay-TV providers, which represent 93% of the US market, shed approximately 1.74 million net subscribers in Q3 2019.