The way consumers start watching TV has changed rapidly over the past two years, according to new data from Hub Entertainment Research. Built-in smart TV apps are rapidly gaining ground as the default entry point for TV viewing, and are now slightly outpacing the fading set-top boxes associated with traditional pay-TV services. Masu.
According to Hub’s annual Decoding the Default survey, nearly a third (32%) of viewers say they turn on a smart TV app first when they’re ready to watch video content. , up 10 points from the 22% who turned it on. Set-top boxes (including live, VOD, and DVR) are still at the 30% mark for many, but that’s down significantly from 41% in 2021.
“Just two years ago, almost twice as many viewers started with a set-top box than started with a smart TV app. But now they are essentially equivalent as the default viewing option,” Hub said. Entertainment is mentioned in the analysis.
Hub’s analysis and findings also suggest that securing your position as users’ default TV source is important, especially when it comes to retention. When asked if they can keep just one provider or service, companies that use a particular source by default are significantly more likely to say they would keep it.
A separate GlobalData study released Wednesday found that U.S. cable and satellite pay-TV services continue to see subscriber declines amid a continued shift to streaming services and people who will never turn to traditional pay-TV. The service in the first place turned out to be further complicated by a possible younger generation of viewers.
According to the company’s latest report, U.S. pay-TV household penetration is expected to reach 42% in 2023, which is still a significant number, compared to 2009 and 2010, when penetration was over 85%. This reflects a significant decline since then, and is expected to decline further. According to GlobalData, total U.S. pay-TV terrestrial subscribers are expected to fall below 50 million by 2025 as AVOD, FAST, virtual MVPD, and SVOD capture viewer attention. (GlobalData’s pay TV numbers include virtual MVPDs (which offer cable-like channel lineups with live TV subscriptions, but delivered over the Internet) such as YouTube TV, Hulu Live TV, and Sling TV. )
Impact of live broadcasting and sports
Another factor to consider is the impact of live news and sports on viewers’ default TV sources. According to Hub data, live programming, sports, and news are the main attractions (45%) for users who choose to watch TV from an MVPD set-top box.
And, as GlobalData Principal Analyst Tammy Parker separately noted, sports have long been seen as a strong support for traditional pay-TV services, but that is changing.
“Sports programming has been a primary complement to traditional pay-TV services, and that’s still true to some extent, but streaming video providers are increasingly encroaching on that sacred relationship, and some live sporting events are already streaming We’re moving to a platform,” Parker said. commented. “For example, viewers who want to watch NFL Thursday Night Football or Major League Soccer’s MLS season pass will need to use Amazon Prime or Apple TV+, respectively. Disney’s expected launch of a standalone ESPN streaming service It will further drive an exodus of viewers from traditional linear TV providers.”
Mark Loughney, senior consultant at Hub Entertainment, also pointed to the shift to live TV and sports streaming.
“The trend toward more live news feeds and major sports offerings on streaming services is eroding two of the key drivers for viewers who default to MVPD set-top boxes,” Loughney told Hub. I commented on the results of a recent study.
However, in a separate study, despite the predicted decline in global pay TV, Ampere Analysis found that cable and satellite platforms remain “a powerful force in the television world, with significant growth in streaming products.” “distribution partner,” citing recent agreements between Charter and Disney that include DTC. Streaming services bundled with Charter TV packages.
“This packaging structure is already becoming commonplace in Europe and parts of Asia, and provides a framework for traditional cable TV companies to shift their businesses into streaming aggregation businesses and stabilize subscriber trajectories. “We’re committed to delivering the best possible results to our customers,” Ampere senior analyst Rory Gooderick said in a statement.
Some companies, like Xumo, a joint venture between Charter and Comcast, aim to bridge traditional linear and streaming viewing. This fall, the joint venture introduced the Xumo Stream Box device, which provides integrated search and discovery functionality across pay TV and streaming apps. This will be the cable operator’s future flagship video product (earlier this year, Charter executives announced that two-thirds of its video sales are already fixed) – no top box, no customer (Tap the Spectrum TV app instead).
And with the popularity of set-top boxes and the number of pay-TV subscribers both on the decline, smart TV manufacturers’ TVOS, which houses built-in apps, also leverages an interface that increasingly acts as a gateway to the TV. This may be a sign that it will become possible. Browse to provide content options as well as advertising opportunities.
“As smart TV menus become the primary destination for more viewers, we cannot overstate the importance of providers installing their apps on TVs,” Loney commented. .