Is OTT Eating Into OTA, While Killing Cable TV?

0

We’ve all seen the studies that point to continued cord-cutting thanks to the rise of over-the-top (OTT) choices for video news and entertainment.


But, is broadcast TV at risk from OTT growth?

This study says yes, making it required reading for all TV station owners.

One of the key findings in the 2019 Consumer OTT Report from OpenX and The Harris Poll is that “a majority of Americans spend more time watching OTT than they spend watching traditional cable television.”

But, the OpenX/Harris Poll report also makes the following declaration:

“With a declining appetite for live TV, a majority of
consumers that watch an OTT service have either
cut the cord already or plan to do so within the
next year.”

That’s disturbing news for MVPDs that claim OTT viewership and consumption of cable TV channels are commonplace. Further, some cable services including Comcast’s Xfinity service have integrated such OTT giants as Netflix into their offerings.

The study acknowledges the Xfinity/Netflix partnership, noting, “Cable companies have recognized this shift and are making smart moves to provide content to their customers in new ways.”

But, for OpenX/Harris Poll, that involves more OTT offerings. Given the report’s title, this is a good thing, in their view.

“In the coming year, with the launch of a WarnerMedia OTT service from AT&T and an NBC Universal streaming service from Comcast, several major cable companies will make significant moves to continue evolving for an OTT world,” the report states.

Yet, there’s widespread belief among broadcast TV groups that an over-the-air renaissance is afoot, given the coming benefits to consumers and advertisers of next-gen broadcast TV (ATSC 3.0) and its near-ubiquitous no-cost accessibility. It’s one reason why Gray Television on Wednesday announced that it will launch a OTT/digital multicast offering focused on the “country lifestyle” in an attempt to woo viewers from Viacom’s MVPD-distributed CMT, and Discovery Inc.’s Great American Country.

Pro-OTT OpenX and The Harris Poll view over-the-top growth differently.

“The addition of OTT viewing time is not purely
additive to overall time spent on video. In fact,
15% of OTT consumers watch zero live television
and most OTT watchers consume more OTT
content daily than traditional TV.”

While that’s certainly a cringe-worthy conclusion for broadcast TV, and MVPDs should be concerned, it is the purveyor of cable television channels that is likely the most endangered in an OTT world.

  • 56% of cord cutters say cable is no longer necessary with services like Netflix and Hulu
  • Millennials watch twice as much OTT content than live TV

Respondents were then asked what those who dumped cable TV miss about it, if anything. The results point to the biggest reasons why broadcast TV’s future is bright.

These are just some of the findings from what OpenX and The Harris Poll call the “most comprehensive assessment of the OTT consumer completed to date.”

More than 50% of all Americans now use an OTT service.

“For advertisers, this presents a massive untapped opportunity,” the report states. “In 2018, U.S. advertisers spent approximately $70 billion on TV ads, yet just $2 billion was spent on targeted, addressable TV ads.”

Cue the digital marketing and programmatic pros, with next-gen TV still years away.

“With OTT capturing a significant percentage of total consumer video time, yet less than 5% of total spend, an enormous shift in how marketers diversify their advertising strategy is on the horizon,” the report continues.

Yes, that’s true. For broadcast TV, ATSC 3.0 will bring parity — and perhaps better ROI — for marketers through addressable advertising.

Meanwhile, the “favorite TV shows” among OTT streams are … cable TV programs. No. 1 is AMC’s The Walking Dead, while No. 2 is HBO’s Game of Thrones. 

In fact, the entire top 10 is comprised of programs airing on broadcast or cable TV — and are not OTT-exclusive shows.


OTT Streamers Favorite TV Shows
1. The Walking Dead
2. Game of Thrones
3. Big Bang Theory
4. NCIS
5.Grey’s Anatomy
6. This Is Us
7. Friends
8.Shameless
9. Supernatural
10. The Office


 

“When looking at what content is most popular, even with OTT platforms spending billions of dollars on original content, not a single Netflix, Hulu or Amazon original made the top 10 favorite TV shows of OTT users polled,” the study notes.

PRICE POINTS, AD ACCEPTANCE

The OpenX/Harris Poll report also delves into how much consumers are willing to pay each month for the best OTT service package.

“For the right type of premium experience, streamers are willing to pay up to $24 per month for a single OTT service — nearly twice the current Netflix subscription price,” the report says.

Then, there’s the skinny on whether or not consumers would prefer an ad-supported device. At present, Hulu offers an advertising-supported platform, available for free for Sprint customers.

Some 29% said they’d stomach 2-3 minutes of ads if they could pay $5 per month; Some 25% of respondents say they’d put up with 10 minutes of ads if they didn’t have to pay anything for the service.

This suggests that content is king, and unless cable and broadcast TV channels offer similar content of desire — or better content — any OTT will win.

What about those who don’t want any ads at all? Some 46% of respondents say stop the ads, and they’ll happily pay $10 a month to eliminate the spots.


Click here to view the report in full:

http://welcome.openx.com/rs/745-BUQ-779/images/2019_OpenX_Consumer_OTT_Report.pdf