OMD: Streaming Reaches Tipping Point, Used By More Than Half Of All TV Viewers

by , Aug 22, 2011, 5:14 PM
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More than half of the U.S. population and 80% of Internet users are now streaming video as part of their regular TV diet, according to a new study from Omnicom media agency OMD.  

The study suggests that the video streaming trend is poised to grow further with technological advances that improve the quality of the experience.

Streamers already deviate from the traditional viewing standard: about 27% of their TV intake occurs outside of regularly scheduled programming times.

It prompts the question -- just how a big a threat is streaming to normal programing patterns as transmitted by broadcasters, cable and satellite operators?

The study showed that 24% of the nearly 1,600 respondents who regularly stream videos have either already cancelled their cable or satellite service or are open to doing so. The research did not specifically address the reasons for that churn, or the mindset to consider cancellation.

But at the very least, the growth in viewing to video streams should be setting off alarms at mainstream TV programmers. Of course, many are on the case: CBS has an agreement with Netflix and NBC, ABC and Fox are partners in Hulu, to name just a couple of examples.

OMD researchers say they don't believe that video streaming will become the primary TV programing source, at least in the foreseeable future. "We don't look at it as a replacement for TV, but rather as a complement to traditional TV viewing," said Erin Bilezikjian-Johnson, group director, custom Research & Insights, OMD.

The reasons for the growing popularity of streamed content are pretty clear. People don't want to be tied to programming schedules dictated by others; they find the number of ads and interruptions -- as well as the general tenor of the messaging in traditional TV channels -- to be annoying, per the study.

That said, the study also found that nearly two-thirds of respondents would not cancel their cable or satellite service and rely solely on streaming video. For now, quality appears to be an issue curbing the growth of video streaming.

When asked why they don't watch more streaming videos, the answer most often provided (37%) by those polled was that they simply prefer watching regular TV. And 22% said that streams were "difficult to watch with other people." Twenty percent cited general quality issues, while another 20% said streaming screens were too small.

But those objections will likely vanish with "improvements in the quality of the video streaming video experience," thus fueling additional growth, the OMD report stated.

Among those who regularly view streamed content, about one-third of respondents said they do it daily or multiple times a day. Another 14% said they do it four to six times a week, while 20% reported viewing streamed content two to three times a week.

Overall growth is likely to come from older viewers -- as two-thirds of respondents 35 years old and up said they would watch more streamed content in the next 12 months than they do now, compared to only about a third of the 18- to-34-year-olds. But younger viewers will drive video streaming to additional technology platforms. About half of the respondents age 34 or younger said they planned to watch more content on portable devices in the future, compared to just 7% of those 50 and up.

The top five most popular streamed genres, the study reported, are weather reports, news, full-length TV shows, celebrity news and gossip and music videos. The takeaway for advertisers, said Pamela Marsh, director of custom research and insights, OMD: "If the intent of the advertiser is to achieve larger reach," then news and weather and other "time-sensitive content" should be part of the buy.

The top reasons cited for watching: entertainment, the freedom to watch at any time, to catch up on a missed programs, the ability to watch anywhere and commercial avoidance.

As to formats, most of those polled said they would prefer to see an ad before a video stream than in the middle of it. And half said they would prefer to have a choice of ads to consider being exposed to as opposed to being forced to watch a specific ad. Seventy percent said they would prefer to watch funny ads in video streaming -- more than double any other ad genre.

3 comments on "OMD: Streaming Reaches Tipping Point, Used By More Than Half Of All TV Viewers".

  1. Joel Rubinson from Rubinson Partners, Inc.
    commented on: August 23, 2011 at 7:52 a.m.

    I find articles like this to be misleading. According to the latest Nielsen cross-media report, TV still accounts for over 95% of video viewing minutes. What tipping point???

  2. John Grono from GAP Research
    commented on: August 23, 2011 at 8:58 a.m.

    You raise a fair point Joel - though I believe that the Nielsen data pertains just to in-home TV viewing and not away-from-home viewing. It may also only be based on video that has a reference code - i.e. has been broadcast or on cable/satellite - and not UGC or other online-only content.

    Given that it still looks dodgy. There is a potential cross-check in the data though. The report references that 24% of the n=1,600 who regularly stream either have or are likley to cancel their cable or satellite subscription. If we knew the total sample (to work out what proportion are 'regular streamers'), and the proportion who say that they have already cancelled cable/satellite then we could calibrate that against known/published cancellation rates.

    Full disclosure: ex OMD Australia employee.

  3. Doug Garnett from Atomic Direct
    commented on: August 23, 2011 at 6:38 p.m.

    My sense is there's a ton of loaded language here that dramatically exaggerates the change. But heck, why not exaggerate to get big headlines? This study swallowed the "youth rules" and "radical change" theories of the tech biz hook, line, and sinker.

    Perhaps because the headline's probably not true. (Tho' I haven't been able to get my hands on the study to know for sure.)

    A few specifics: "More than half of the U.S. population and 80% of Internet users are now streaming video as part of their regular TV diet". Sounds important. But, what the heck is a TV diet?

    BUT, did this study specifically isolate the streaming that replaces TV viewing or can be attributed as extra TV viewing? I doubt it. And right now everybody streams video online with regularity. But how much is TV?

    The "80%" sounds flat out wrong - an complete error once it's boiled down like this article. After all, when, with TV, have 80% done ANYTHING reliably? Not even 80% have ever had cable!

    Here's a possibly intentional skew: "The study showed that 24% of the nearly 1,600 respondents who regularly stream videos have either already cancelled their cable or satellite service or are open to doing so." So, was it .5% who have cancelled (consistent with national statistics)? And, what was the criteria for "open to doing so"?

    My guess: They asked the question: "If you could get everything you already get via cable but get it by streaming, would you cancel your cable?" Yup. Lots would. But there's a massive "IF" at the beginning.

    And that means an accurate report would state: A tiny number have cancelled cable and a much larger group would consider it if streaming could eventually grow to mimic cable. (Of course, it doesn't right now.)

    So, yet another study exaggerated by an agency who wants some big headlines. Yawn.

    Here's the question for OMD: What subtle psychology makes it so important to them to kill TV? Because it looks like they're working quite hard to invent what doesn't actually exist.

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