Nearly 50% Of Households Stream Without Pay TV, Streaming Penetration Slows In Q3

Although streaming trends are growing versus pay TV, there is more overall evidence that streaming is a maturing market as its penetration of U.S. households inched down 82% in the third quarter from 83% in the second quarter, according to a new HarrisX/MoffettNathanson Research analysis.

At the same time the gap is widening between streaming platforms and legacy pay TV’s distribution system, as 49% of U.S. households now are streaming platforms without pay TV and 33% are streaming with pay TV, compared to 48% (streaming without pay) and 36% (streaming with pay) in the second quarter.

Non-streamers (with or without pay) comprise 18% of homes -- up from 17%.

Looking more granularly, the streaming slowdown was pushed by the top three services showing a decline and flattening -- Netflix, Prime Video, and Hulu.



Responses to the question of which paid services you or someone in your house are currently using to stream content revealed that Netflix was at 53% -- down from 55% in the second quarter. Prime Video was flat at 43%, as was Hulu at 35%, while Disney+ ticked down 27% from 28%.

Research shows the number of streaming services subscribed to (or watching) has declined slightly on average per households that stream -- with 3.7 subscribed and 4.0 watching compared to. 3.8 and 4.1, respectively, for the previous quarter.

Viewing of all streaming services appears to be weakening among older viewers 50 and older -- a reversal from the second quarter.

The strongest demographics are with middle-aged users 25 to 50, and specifically the 35-39 demographic, for which Netflix improved the most.

One service -- Max -- witnessed declines in every age group, with the biggest decline among 18- to-24-year-olds. 

Analysis here suggests the lack of any hits such as “The Last of Us,” which did well with young viewers in the previous quarter. But authors of the study also say “it seems the addition of Discovery+ content has also fallen short of significantly broadening the platforms appeal.”

Overall, for all of streaming services, “there were no new breakout hits this quarter. Several older shows saw successful new seasons, and some old network procedurals found a new audience -- namely “Suits” [which originally aired on USA Network], but no debut show managed to rank as a platform favorite among users.”

Third-quarter consumer research comes from 6,500 household decision makers 18 years and older, measuring attitudes and behaviors across TV, Internet, landline, and streaming services. 

1 comment about "Nearly 50% Of Households Stream Without Pay TV, Streaming Penetration Slows In Q3".
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  1. Ed Papazian from Media Dynamics Inc, October 23, 2023 at 9:49 a.m.

    Let's not forget that another 15% of U.S. TV homes qualify as "legacy" TV users because they have over-the-air broadcast TV reception , though many also stream. And another substantial block of homes uses vMVPDs to get "legacy" TV content. So "pay TV" subscriptions alone do not tell you the size of the "legacy" TV user universe. The percent that are streaming exclusives is probably around 20% while the comparable figure for "legacy" TV is probably about the same.

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