Despite recent reports to the contrary, the move to streaming is not slowing down; the trajectory of what that move might look like appears to be changing, but the steady march towards streaming continues unabated. According to research firm Horowitz Research’s State of Pay TV, OTT & SVOD 2022 report, the move away from traditional pay-TV has been drastic in recent years.
In 2020, the survey indicated that 81% of U.S. consumers paid for either cable or satellite service, but that number fell to 63% in the 2021 version of the study, and this year, the percentage of pay-TV subscribers has dropped to just over half (51%).
As those traditional pay-TV numbers decline, Horowitz notes that 37% of viewers are paying for a subscription video-on-demand (SVOD) service, while not opting for cable or satellite. But, the number of SVOD subscribers did decline year-over-year. In the 2021 survey, 74% of viewers were paying for at least one subscription streamer, but in 2022, that number has fallen to 62% — although 10% more admitted to using an SVOD via another user’s password.
While fewer consumers might be signed up for paid-streaming services, how much they are paying is growing dramatically. When combining the monthly SVOD fees with how much virtual multichannel video programming distributors (vMVPD) cost, the average monthly streaming bill is $75.80 per month, an increase of approximately $26 over last year. vMVPDs are essentially the streaming equivalent of a traditional cable or satellite package.
That monthly bill seems like a rather exponential increase in one year, but when combined with the fact that cable and satellite usage has dropped 30% since 2020, it would make sense that a significant portion of those customers are finding similar — but cheaper — versions of those experience via streaming with services like YouTube TV, Hulu Live TV, Sling TV, fuboTV, and others.
Perhaps because of the apparent influx of streamers moving away from traditional pay-TV, Horowitz found that free, ad-supported TV content (either via streaming or antenna) has remained consistent year over year as 66% of viewers use these services.
There is no doubt that streaming is the future of television entertainment, but it does appear that the grounds underneath the industry are still settling into place. Horowitz Research chief revenue officer and insights and strategy lead Adriana Waterston believes that there will be two main ways in which streaming will continue to evolve from where it sits now.
“We expect to see more advertising in free or low-cost, ad-supported tiers, such as the one Netflix is planning to offer, and more consolidation of services and subscriptions like what just happened with Discovery and WarnerMedia,” she said. “Hopefully, for the consumer, this will translate to some cost savings, more predictable spending, and an even better user experience across the board. It will also translate to new opportunities for brands and advertisers to connect with audiences in new and innovative, interactive ways.”