Advanced Television

More OTT content drives cord cutting

June 22, 2016

As consumers find themselves with a wider variety of OTT content options, price is becoming less of a factor in the decision to cut the cord with pay-TV providers while content availability increasingly drives decision-making, according to content delivery specialist Limelight Networks’ semi-annual State of Online Video research report, which examines consumer behaviours and perceptions around watching online video. Streaming video services are surging in popularity, with seven out of 10 consumers now subscribing to at least one service.

Twenty-nine per cent of respondents cited rising prices as the primary reason they would cut the cord, down more than 8 per cent since May 2015. By contrast, 20 per cent of consumers said a key factor would be the ability to directly subscribe to the channels they want online, up 4 per cent in the same timeframe. Surprisingly, the number of respondents who would “never terminate cable or pay television subscription” has risen from 10 per cent to 15 per cent since 2015. This reinforces the diminishing impact of price on cord cutting and a shift to content availability driving behaviour.

The availability of content is particularly important to Millennials (aged 18 to 35), who were similarly price-averse as the population as a whole. The most striking contrast is that Millennials are seven percent more likely to shift viewing to OTT content and cancel pay TV subscriptions when they can subscribe to channels directly. Millennials are also at the centre of the overall dramatic surge in OTT content consumption. Eighty per cent of Millennials subscribe to at least one OTT service and 39 per cent report watching at least seven hours of online video per week. Among the entire consumer population, 69 per cent subscribe to at least one OTT service – a ten per cent increase since May 2015.

The study also found that computers and laptops remain the dominant devices for watching online video; however, their days at the top may be numbered. For Millennials, the smartphone is the most popular device for watching online video and gaining ground among the broader population.

“Our research continues to show increasing adoption of OTT content, especially among younger consumers,” said Nigel Burmeister, vice president of global marketing at Limelight Networks. “Consumers are demanding access to content when they want it, using the device of their choosing. Traditional providers and delivery models are increasingly at risk of being left behind as consumers become more savvy.”

Additional key findings from the research include:

  • Video quality is becoming increasingly important. Consumers continue to report buffering to be the most frustrating part of watching online video, but poor video quality is starting to close the gap.
  • YouTube’s decline may signal an interest in higher quality online content. TV shows and movies remain the most watched type of online video, with original content/YouTube demonstrating a steady decline since the last study. Millennials in particular are watching less YouTube in favour of OTT services.
  • Advertising in online video is becoming more accepted. Respondents are increasingly fine with online video ads – particularly if it allows them to access content for free. Interestingly, Millennials are the most accepting of advertisements.
  • Millennials are the video sharing generation. Across all social media channels, Millennials share dramatically more video than their generational counterparts with Facebook continuing as the channel of choice for all generations.

The State of Online Video report is based on a survey fielded in May 2016 that collected data from 1,086 consumers ranging in age, gender and education, located in the United States, the United Kingdom and Canada.



Categories: Articles, Consumer Behaviour, Content, Markets, OTT, OTT, Research