76% Of U.S. Households Have OTT Services, Vs. 62% With Traditional Pay TV

Three-quarters (76%) of U.S. households had OTT video service subscriptions, versus just 62% with traditional pay-TV services, as of the end of March, according to a new analysis from Parks Associates based on a survey of 10,000 U.S. broadband households.

With movie theaters closed and cinematic productions and live events cancelled or postponed due to the pandemic, “services are lacking some high-dollar content at the same time overall video consumption is accelerating,” says Steve Nason, research director, Parks Associates. “OTT services responded by adding new releases and extended free trials. As a result, OTT subscriptions have increased, while the churn has declined slightly since last year.”

“But we will see, as lockdowns ease, if these strategies lead to sustainable growth or if the OTT industry needs to adjust again to new viewing patterns," he adds.

Of the 41% of households that took trial subscriptions for at least one OTT service in the last 12 months, 69% adopted at least one paid subscription, according to the survey.

"Trial offers can be successful in attracting new users, but as competition increases and household budgets shrink, providers will need to explore new service models, such as making a portion of content free or offering discounts to longer-commitment subscriptions," Nason asserts.

Among all households that report subscribing to at least one OTT service in the last 12 months, the most-cited reason (nearly 30%) was wanting to watch a specific program, followed by being offered a free trial (chart above).

5 comments about "76% Of U.S. Households Have OTT Services, Vs. 62% With Traditional Pay TV".
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  1. Ed Papazian from Media Dynamics Inc, June 8, 2020 at 11:16 a.m.

    Karlene, it should also be noted that many homes get broadcast TV via over-the-air reception while broadcast and cable fare is also available via vMVPDs and also from the new SVOD services offered by various parties---Disney+, Comcast, YouTube TV, etc. Many people mistakenly take the "pay TV" penetration percentages as reflecting the totality of "linear TV"'s ad- supported coverage---which is simply not the case.

  2. Matt Collins from Simulmedia, June 8, 2020 at 3:06 p.m.

    According to Pew Internet Research published in Feb. 2019 (the most recent available of its kind), only about 73% of adults use broadband at home. The WSJ's article this past weekend on how remote learning is failing shows just how many of our fellow Americans still don't have a reliable internet connection. Had the survey in this article been conducted with input from a panel of households that are representative of this reality, the results almost certainly would have looked very different.

  3. elizabeth parks from parks associates, June 8, 2020 at 5:43 p.m.

    Since there are questions on our methodology and specifically about the representation of our sample, I wanted to share details of Parks Associates research. THis is nationally representative data of the US. Also Pew data doesn't report 73% - its 90%. https://www.pewresearch.org/internet/fact-sheet/internet-broadband/ 


    All survey respondents are heads-of-household age 18 and older

    •A head of household must have equal or greater decision making responsibility for purchasing technology products/services.
    All survey respondents have broadband internet access at home

    •Broadband households (BB HHs) have access to broadband internet service in their home, delivered to fixed or mobile devices. BB HHs may use multiple methods of accessing broadband internet at home.
    •Fixed broadband households have broadband internet service to a fixed point in their home through one of the following:
    a)DSL or fiber optic high-speed Internet services from a telephone company
    b)Cable high-speed Internet services from a cable company
    c)Satellite broadband service
    d)A fixed wireless or 5G home Internet service
    •Mobile broadband households have broadband internet service to a mobile point in their home through one of the following:
    a)3G/4G wireless service with a laptop computer
    b)A mobile phone or iPad/tablet with 4G/5G wireless Internet access
    •Mobile-only broadband households use one of the mobile broadband options but no fixed broadband option in the home.
    •As of year-end 2019, Parks Associates estimates 89% of all US households have fixed broadband in their home.

     

     

  4. Matt Collins from Simulmedia replied, June 8, 2020 at 5:54 p.m.

    Thanks, Elizabeth, for sharing the methodology. Appreciate the transparency.
    The link you shared didn't work, but I think this is the one you intended to show:
    https://www.pewresearch.org/internet/fact-sheet/internet-broadband/#who-uses-the-internet
    It shows that 90% of adults use the internet, but that's not the same as broadband household access. Scroll down and you'll find the 73% number.
    The WSJ story this weekend, which shows a state-by-state measure, also supports the observation that a significant number of Americans don't have reliable internet access access. https://www.wsj.com/articles/schools-coronavirus-remote-learning-lockdown-tech-11591375078
    All of this suggests that a survey that's representative of all households would result in a different outcome.

  5. John Grono from GAP Research, June 8, 2020 at 6:09 p.m.

    Any data on usage as opposed to subscription or penetration rates?

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