Commentary

Connected TV, Streaming: Robust Growth Continues

This week brought new stats confirming continued, robust growth for connected TV device ownership and usage, plus news of comScore launching panel measurement of connected-device behavior. Also, news that the numbers of people subscribing to free or paid streaming video services are now on par with those who use paid television services.

Meanwhile, the latest primetime broadcast ratings show the broadcast networks suffering new lows.

Connected TV Device Penetration, Usage Growth
Looking at the connected TV scenario, Nielsen’s first more “brand-granular” analysis of devices finds that as of Jan. 31 (per its national TV panel measurement), 29% of all U.S. homes now own enabled smart TVs — up from 22% in January 2016.

In addition, 23% own a digital streaming device such as an Amazon Fire TV, Apple TV, Google Chromecast or Roku, up from 19% in June 2016. Roku and Apple TV have the highest penetration, followed by Amazon Fire TV and Google Chromecast. In addition, nearly 11% have streaming players from other brands or PCs, tablets or smartphones connected to their TV sets.

Game console penetration, while high, was flat year-over-year:  42% of households own a Microsoft Xbox, Nintendo Wii or Sony PlayStation. The major device brands (including older and newer generation platforms) have similar levels of household penetration.

Usage-wise, the panel data for the month of January show that households with smart TV apps used them more than 20 days, and during usage days, spent more than two hours tuned into them, on average. Eighteen percent, or 21 million homes, used  Amazon Fire TV, Apple TV, Google Chromecast or Roku for an average of nearly 15 days during the month, and spent more than three-and-a-half hours on them during those usage days.

Streaming Services Growth
The latest survey research on video and content trends from the Consumer Technology Association (the consumer electronics industry’s standards and trade organization) finds that, for the first time, the percentage of free or paid streaming video subscribers in the U.S. (68%) has caught up to the number of paid TV subscribers (67%). Further, CTA says it expects streaming subscribers to surpass paid TV services by “a fair margin” within a year or so.

CTA also found that the time consumers spend watching video content on TVs — 51% in 2016, down 11 points since 2012 — is now equaled by (within the sampling margin of error) time spent watching video content on all other consumer technology devices including laptops, tablets and smartphones, at 49%.

The total amount of video watched by consumers across devices has increased 32% since 2001, from 12.7 hours per week to 16.8 hours per week, reports CTA.

CTA says its study included both a survey conducted via Internet Web form to an online national sample of 1,000 U.S. adults, and qualitative responses from an online consumer focus group. Both were conducted last October.

TV Screen Still Reigns; Primetime Still Declining
Nielsen’s report confirms that amid the growth in viewing content on various devices and platforms, the TV set “overwhelmingly” remains consumers’ first choice, though it doesn’t offer specific stats. “TV-connected devices represent a new and growing way to bring content to the TV set” — the driver behind the expanding over-the-top content options from both traditional media and streaming players, the report underlines.

CTA projects that even with 96% of Americans owning TVs, and 2.8 HD TVs per household, on average, sales of 4K Ultra HD TVs will significantly outpace HD TV sales this year. However, it also projects that 2017 sales of all TVs will be flat with 2016, at $19 billion.

The research confirms that people want larger screens and a better picture, CTA communications SVP Jeff Joseph told MediaPost earlier this week. “The TV remains the essential entertainment hub for activities such as gathering to watch sporting events, watching movies as families and playing video games together.”

Still, CTA also projects that total 2017 TV sales will be flat with 2016, at $19 billion.

And as the advertising buy and sell sides are all too aware, the numbers of consumers watching broadcast network primetime and other programming on those TV sets continues to dwindle in part because of the cannibalization effect of alternative platforms and the viewing habits of younger consumers.

Nielsen data through February 26 — 23 weeks or three-quarters of the way into the 2016-2017 season — point to the top four networks headed for their fifth consecutive year of falling below an average 3.0 rating among adults 18 to 49, pointed out Ad Age’s Anthony Crupi.

Connected TV Measurement Vs. Targeting  
Back on the connected front, comScore announced the launch of Connected Home, its first syndicated service to use Rentrak’s Total Home Panel (measuring 62,000 active devices per day over 12,500-plus U.S. homes).

Subscribers will receive measurement for areas including device penetration, usage frequency, engagement time, household demographics, and cross-device activity, spanning computers, mobile phones, tablets, streaming sticks, smart TVs and Internet of Things (IoT) devices, according to comScore.

Obviously, it’s another indicator of the growing — albeit still limited, for advertising purposes — importance of connected TV and other connected devices.

However, another provider questions the extent of the practical value to advertisers of device usage data, as opposed to actually identifying connected TV users and enabling platforms to deliver consumer data-driven targeted campaigns to them. 

“A rough analogy is telling an advertiser that Household X owns a Honda and they drive it 10,000 miles a year, versus allowing them to reach Household X, anonymously, at those places, as we’re doing,” asserts David Wiesenfeld, chief strategist for Tru Optik, an audience measurement and data management platform/marketing cloud built for CTV and OTT. Tru Optik has partnered with Experian and others for third-party consumer data, and recently announced partnerships with the Videology and LiveRamp platforms. 

3 comments about "Connected TV, Streaming: Robust Growth Continues".
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  1. Ed Papazian from Media Dynamics, March 13, 2017 at 9:10 a.m.

    Karlene, it's interesting to see how Nielsen presented its findings on smart TV to show this aspect in the best possible light. For example, we have 29% of the homes with this app----an increase over last year, which is fine. Then, we are told that households that have smart TV apps use them about 20 days per month for around 2 hours per day. Wow!.  If we analyze those numbers we get 1.3 hours of smart TV use per smart TV  home ----counting those not using the app---per day which would normally translate into about 40 minutes per person in a smart TV  household.  Project that against the total population----not just smart TV owners----and you get about 12 minutes per day----or roughly 3-4% of all viewing. No doubt the incidence of smart TV usage is growing, but it's not nearly as darmatic as Nielsen's report suggests.

  2. Ed Papazian from Media Dynamics, March 13, 2017 at 10:25 a.m.

    "darmatic"----another interesting typo. I wonder if there's really a word like this?

  3. Kevin Barry from Simpli.fi, March 13, 2017 at 12:16 p.m.

    Karlene--
    Does the researchers state whether the penetration of connected media non-duplicated?  It really makes a difference.  29% of homes with enabled smart TVs, PLUS "in addition" as your article puts it, 23% digital streaming devices from the main streaming players and, "in addition" 11% from other streaming players.  I have a connected smart TV and an Apple TV and a Chromecast and a PS4. Would I count as one connected home or 4?  Not to sell short this significant change in video distribution methods, but it's good to have a clear idea of its dimension.

    Similarly, is TV Everywhere streaming counted as "free or paid streaming video subscribers".  If my streaming access to HBO Go, which is "paid for" by my Optimum subscription, makes me also a "paid streaming video subscriber", then it's hard to see what is the real dimension of non-traditional distribution.

    These aren't rhetorical questions--could you please clarify whether the penetration of connected TV devices is non-duplicated and whether the alternative means of distribution exclude paid TV subscribers who get streaming video included in their monthly paid subscriptions? 

    Thanks

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