Clearleap, a company that works with the likes of HBO, Scripps, and A+E Networks to deliver viewing experiences across screens, has conducted a survey to learn more about which streaming services US consumers use, what their viewing habits are, and what they value most in an OTT offering. The results offer a look at how average users perceive streaming services, and how they engage with them.

Survey highlights include:

• Streaming service penetration is now on par with cable. Of those surveyed, 78.85 per cent reported currently subscribing to cable, and 71.37 per cent confirmed that they had used a streaming service(either previously or currently).

• Millennials are leading the OTT revolution, leaving cable behind. Of respondents between the ages of 18-29, 70.32 per cent use a streaming service, while only 64.41 per cent have a cable subscription. Additionally, just over one quarter (26.48 per cent) of respondents in this age category have never subscribed to cable, confirming that younger viewers don’t have the same attachment as their parents or grandparents.
• If they received their preferred content, users would be willing to pay slightly more than most services’ monthly fees as of July 2015. When current streaming service users were asked what they would be willing to spend on a service that featured their three preferred types of content, 42.66 per cent indicated that they would pay $10- $25 per month, which is higher than what Netflix, Hulu, and Amazon charged at the time the survey was issued.

Streaming services are mainstream, and the majority of users “love” them.

To examine the penetration of streaming services among consumers, Clearleap asked respondents how they watched TV and video content. Of those surveyed, 78.85 per cent reported currently subscribing to cable, and 71.4 per cent confirmed that they had used a streaming service. This affirms that OTT offerings are indeed reaching the masses on a level that is on par with cable.

As expected, Netflix continues to maintain the largest market share, followed by Amazon and Hulu, respectively. Of those who self- identified as using one or more streaming services, 83.47 per cent confirmed using Netflix, 38.23 per cent use Amazon, and 22.37 per cent use Hulu.

Additionally, current streaming service users are generally happier with the product than cable subscribers. When asked if they had considered canceling their cable subscription, nearly half of respondents who currently subscribe to cable (47.57 per cent) said yes, citing high costs (34.14 per cent), poor customer experience (7.52 per cent), and not having enough time to watch TV (2.55 per cent). Interestingly, only 3.36 per cent indicated that they would cancel their subscription because they had signed up for a streaming service. This indicates that consumers don’t view OTT offerings as a direct replacement for cable, although the price point is more attractive.

By comparison, the majority of current streaming service users (62.76 per cent) responded that they “love” their streaming service and wouldn’t cancel it. Additionally, 11.73 per cent shared that they wouldn’t cancel because the subscription does not belong to them, indicating that login sharing is prevalent.

Also worth noting is that 8.16 per cent said that they maintain their subscription but never use it, perhaps indicating that they subscribe for other reasons (i.e. Amazon Prime’s free shipping).

Younger users prefer streaming services to cable, and are more likely to watch on mobile devices

A whopping 84.93 per cent of respondents ages 18-29 have used a streaming service at some point in time, with 70.32 per cent reporting that they currently use a service. This indicates how deeply streaming services have penetrated into younger consumers’ lives, despite the fact that they are relatively new to the overall television ecosystem.

In comparison, 73.52 per cent of respondents ages 18-29 have subscribed to cable at some point, with only 64.41 per cent stating that they currently have a cable subscription. Over a quarter (26.48 per cent) of respondents in this age category have never subscribed to cable, confirming that younger viewers don’t have the same attachment to cable as older generations. By contrast, a staggering 91.33 per cent of respondents over the age of 30 have subscribed to cable either previously or currently.

When asked about all of the devices on which they access their streaming service, survey respondents under age 30 showed additional indicators of their status as “digital natives.” More than half (57.69 per cent) have watched streaming service content on their laptops, while over a third stream to their smartphones (39.1 per cent). Internet- connected TVs (29.49 per cent), tablets (28.85 per cent), and Xbox (21.79 per cent) clocked in at third, fourth, and fifth, respectively. The variety in screen sizes indicate that younger viewers have less of a preference for watching video on a bigger screen, instead gravitating towards more accessible and portable devices.

By comparison, users in the 30- 44 age bracket watch streaming service content on tablets (32.95 per cent), laptops (31.79 per cent), smartphones (31.79 per cent) and connected TVs (29.48 per cent) to a nearly equal degree. Among older users aged 45- 59, laptops (39.74 per cent) were closely followed by connected TVs (32.45 per cent), which is likely because this group has more disposable income and can afford more expensive products.

Of those who use a streaming service, respondents under age 30 were the most likely to know exactly what they wanted to watch when they logged in (44.39 per cent), compared to 35.94 per cent of those over 30. This illustrates that younger users are more comfortable using streaming services, and are likely more familiar with the specific content available on each service.

Younger subscribers are also more comfortable with login sharing. Of the current streaming service users surveyed, 78.61 per cent of people aged 18-29 shared their login credentials with someone else.

Additionally, nearly a quarter of young people surveyed (22.46 per cent) use a streaming service that does not belong to them. But the sharing doesn’t stop there. By comparison, 64 per cent of current streaming service users between the ages of 30-44 who use a streaming service have shared their login with someone else. The percentage tics up to 68.5 per cent for users aged 45-59, who are likely sharing their credentials with their children, or with other family members.

Streaming service users are looking for a good value, but they would pay more for their ideal service

After Clearleap explored how users watch streaming service content, Clearleap wanted to find out which aspects of the service were most important to them. When current streaming service users were asked about the deciding factor when choosing which service to subscribe to, content (23.58 per cent) and price (22.72 per cent) came out on top, indicating that users are ultimately looking for the best combination of both. Additionally, 17.73 per cent of streaming service users surveyed shared that all of the options listed – content, price, free trial, ease of use, recommendation from a friend, and advertising – played a role in their decision. As with any product, it’s clear that streaming service users are weighing multiple factors to determine the best value.

Next, Clearleap asked users about their biggest frustration with their service. Interestingly, while current streaming service users choose a service because of the content offered, it is also their biggest disappointment when the shows they want to watch aren’t available. Of the streaming service users surveyed, 38.69 per cent cited lack of preferred content as their top frustration. By comparison, technical issues such as stream quality, buffer speed and UX issues are less of an annoyance for most users.

Only 10.71 per cent and 5.01 per cent cited video quality and difficulty of use, respectively. The good news is that, given today’s technology, these problems can be solved – and they are usually easier to fix than acquiring a massive content library. However, one-third of respondents (32.99 per cent) stated that they do not have any frustrations with their streaming service, which underlines the level of satisfaction from many users.

To determine what consumers perceive to be an ideal streaming service, Clearleap asked them to design their own package by selecting three types of content that such a product would have, along with their optimal price point. Current streaming service users wanted movies (67.13 per cent), premium channels like HBO or Showtime (47.73 per cent), major broadcast networks like ABC and CBS (41.26 per cent), and a selection of cable channels like MTV or Bravo (40.73 per cent). Interestingly, sports were fifth on the list, with 28.15 per cent choosing to include them in their ideal service.

Among those respondents who indicated that they do not currently use a streaming service or have never used one, the order of preference for content is slightly different. Movies are still tops (52.51 per cent), followed by major broadcast networks (43.38 per cent), premium channels (39.04 per cent), and cable channels (36.99 per cent). Only 24.2 per cent would include sports as one of the three types of content in their streaming service.

When asked what they would be willing to spend on their ideal service, 42.66 per cent of those who use streaming services would pay $10-$25 per month. As this price point was higher than most services on the market at the time of the survey, it indicates that consumers understand that high-quality content is more costly, and they would be comfortable paying more to receive what they want.

Conclusion and Key Takeaways

Going OTT isn’t an option anymore – it’s a mandate. To stay relevant, reach audiences and grow revenue, content providers need to not only provide a streaming option to consumers, but also address the unique behaviors of today’s younger television viewers. In order to be successful in today’s television market, prospective OTT providers should follow the best practices below:

• Ensure a good value. Consumers are willing to pay slightly more (up to $25 per month) if the service has the content they want. Balancing great content and a fair price is the key to attracting viewers and minimising churn.
• Make it easy to browse, discover new content, and channel surf. While younger viewers may be more knowledgeable about what they want to watch after they log in, older viewers may not be as familiar with the content available on each service. Improve your user experience by including simple features that encourage discoverability and surface relevant content proactively.
• Optimise for screens of all sizes, as tablet and smartphone viewing is significant. Mobile video will only grow in popularity. Get ahead of your viewers’ evolving habits by optimising your service for all screens at launch, and offering apps on key devices such as streaming boxes, mobile phones, and gaming consoles.
• Offer tiered pricing solutions to match login-sharing habits. Especially since younger streaming service users are prone to sharing, new services should offer tiered subscription packages that prompt users to pay slightly more to watch content on multiple devices at the same time.
• Consider the gaps in the market. While movies and TV series are widely available on Netflix, Amazon, and Hulu, live television is missing from the streaming market. Many current streaming service users wanted broadcast channels (41.26 per cent) in their ideal offering, with sports (28.15 per cent), local (20.28 per cent), and news (15.91 per cent) also highly rated by respondents. Content owners should capitalise on the white space by investing in live content that isn’t already easily accessible online.

Categories: Articles, Cable, OTT, OTT, Pay TV