Streaming Brings Choice, Convenience to Audio and Video

“Today’s streaming landscape is as dynamic as the consumers themselves,” says Peter Katsingris, Nielsen’s senior vice president, audience insights. “There is something for everyone, from ad-supported models to subscription-based services that are proliferating and allowing viewers and listeners a chance to lean into the content they want on their own time and in their own way.”

For evidence of streaming’s rise, look no further than Nielsen’s latest Total Audience Report, which notes that 20 percent of all TV usage is streaming content. Streaming users have access to an almost unlimited array of choices: In 2019, U.S. consumers had 646,152 unique program titles to choose from across linear and streaming services — up 10 percent from 2018, Nielsen reported.

In the video market, consumers can choose from dozens of subscription and free, ad-supported streaming providers, with new services launching almost weekly. Most recently, Apple, Disney, and NBCUniversal have unveiled their streaming platforms, joining established players such as Amazon Prime, Hulu, and Netflix; smaller, independent players also dot the market. To meet growing demand, new services are still forthcoming, including one from Discovery.

At the same time Amazon, Apple, and Netflix are spending billions on original content, signing exclusive deals with producers who cut their teeth on linear TV and big-name movie stars. On the service side, Hulu, Roku, and YouTube offer low-cost plans to access live and on-demand programming.

For consumers, streaming services come at considerably lower costs than cable and satellite service. While the number of “cord-cutters” continues to grow, streaming services are adding users, with some customers willing to shell out for paid digital video services and even multiple SVOD plans.

According to Nielsen, 90 percent of streaming video users said they currently subscribe to an SVOD service and nearly one-third subscribe to three or more paid services. Streaming scores particularly well with younger consumers, with 96 percent of adults ages 18 to 34 subscribing to an SVOD service and nearly half of those customers paying for three or more plans.

In Nielsen’s survey, consumers said that access to content is one of the main drivers of their streaming usage. That includes old programming they can’t access on linear TV, as well as new shows and rich libraries of content. They’ll even sign up just to gain access to a service’s exclusive, buzzed-about show. About one-third said they’d sign up for more services to access additional programming.

“Whether it be new original programming or off-the-shelf [shows] that are new to younger consumers today, there is [an] opportunity to attract them to your service,” Nielsen’s Katsingris says. “The challenge will be to keep them there.”

But will there be a tipping point where consumers feel there’s just too much content or they’re paying for too many services? Nielsen reported that 42 percent of consumers surveyed canceled a paid video service because they weren’t using it enough to justify the cost, while 20 percent canceled after they finished a show they signed up to access. And 40 percent say they don’t have time to watch more programming.

To keep churn low, streaming services need to make sure their customers feel they’re getting enough for their money. Among subscribers, 93 percent of U.S. streaming users said they will either increase or keep their existing streaming services, but they’re still looking for value. When evaluating subscriptions, 64 percent of consumers say that overall costs play a factor.

Brands are embracing streaming to reach its engaged viewers; however, they’re experiencing some growing pains. A new study by Conviva reported that streaming ads load slowly, with users waiting an average of 2.27 seconds in Q4 2019, up from 1.14 seconds in the previous quarter. As a result, users are more likely to exit ads, with nearly 50 percent opting out in Q4 2019.

Ad delivery failures were down compared to Q3 2019, which should produce more successful viewing rates, Conviva reported. Marketers are shortening their ads — with the average spot run time coming in at 26.6 seconds in Q4, compared to 38 seconds in Q3.

“As with any disruptive technology, growing pains are inevitable,” says Conviva CEO Bill Demas. “The companies that win the streaming wars will be those able to offer viewers a fast, clear, reliable experience regardless of where in the world they live or what device they use.”

In the audio industry, digital streaming is similarly transformative, although there are some differences from video. Radio retains its place as the most used of all media, reaching 92 percent of all Americans, but digital audio is quickly gaining ground. Sixty-four percent of Americans said they streamed digital audio on smartphones in Q3 2019, up from 45 percent the prior year.

While SVOD dominates streaming video, audio consumers are drawn more to free, ad-supported services, which Nielsen attributes, in part, to the legacy of free over-the-air radio. Digital audio offers listeners more personalization than local radio, and some consumers are willing to pay for subscription plans for additional customization, Katsingris notes.

“Audio consumers are used to accessing content in a seamless manner and, when it comes to paid audio streaming, they demand the same ease of use when navigating this on-demand content,” he says.

With audio and video, the adage “content is king” still rings true. Programming is the biggest driver for subscription video and on-demand audio. With that in mind, Katsingris’ advice to streaming services: guard your flank. “Cost, ease of use, new content, or new seasons of current hits will be important to keep in mind for both current and new streaming services.”

Don't stop now! Stay in the know on audience data with more from Nielsen Data InSites and on audio/video trends with more from Audio InSitesand Alli Romano.

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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.