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Today’s Americans consume more content across more channels than ever before.
The ubiquity of smartphones and the ever-growing list of services to watch, listen and read has led to a rapid growth in media consumption around the country. The average American spends over 9 hours and 30 minutes per day consuming different media content, including online and print press, broadcast and online TV, social media, and radio.
The result is an extremely crowded entertainment landscape, and consumers have been given nearly all the power to pick and choose the services they will pay for. Companies jockeying for our attention have to compete not only with one another, but also with our divided attention spans as many of us access multiple screens at a time.
For advertisers and brands attempting to reach American audiences in this complex media mix, it’s paramount to understand the holistic picture of consumer behaviors. Data from GWI USA sheds light on a few media trends to keep an eye on.
The rise of “cord nevers”
Broadcast TV is still the king of entertainment in the U.S. However, as the potential costs stack up, many are starting to drop some services in favor of others.
By all accounts, cable currently bears the brunt of these service cancellations.
In 2019, Comcast reportedly lost nearly 700k cable TV subscribers, and in Q2 2020 alone this number grew by nearly 500k. Consumers are overwhelmingly prioritizing new streaming services over traditional TV, and the growing number of services to choose from may be driving the rise in cord cutting behavior.
In the past twelve months alone, we’ve seen 5 new major streaming services launch (Apple TV+, Disney+, HBO Max, Quibi, and Peacock).
By Q1 2020, 40% of Americans reported owning a TV streaming device.
So while 58% of the nation currently subscribes to cable TV, this majority is waning, and the possibility for cable to win back lost customers or entice new viewers grows weaker.
The majority of cable TV subscribers are made up of Gen Xs and baby boomers who have likely been subscribers for decades. And even among these loyal age groups, cracks are forming.
57% of cable TV subscribers have also viewed an online streaming service in the past month, and 1 in 5 said that while they watch some cable TV, they favor services like Netflix and Hulu.
Many Americans are going with online alternatives exclusively.
29% have dropped a cable TV subscription, and 13% of cable TV subscribers are planning on dropping their cable service in favor of online streaming in the next 6 months.
And younger generations are less likely to sign up for cable in the first place. These are the “cord nevers”.
As opposed to cord cutters, these “cord nevers” pose a unique struggle for cable TV providers. With a growing number of streaming platforms to choose from, often offering shows and movies without ads at single-digit monthly costs, it can be hard for cord nevers to justify the cost of cable.
While nearly 6 in 10 Americans currently pay for at least one streaming service, there’s a steep drop off for those who pay for multiple subscriptions.
Only 16% of the country pays for 3 or more streaming services, and the fact that this group is 30% more likely than average to have dropped cable means that with more new entrants into the streaming space, the writing is on the wall for cable TV.
The entertainment landscape stands to grow even more complex when new entrants and established services clash over content rights -. aAccess to one specific show can often be the deciding factor to begin or renew a subscription., For instance,and many users may switch services for instance when The Office, Netflix’s most popular show, heads to Peacock early next year.
Account sharing means wider exposure
One of the challenges facing online streaming platforms in the future centers around the sheer volume of users that currently access these services for free.
It’s an open secret that many viewers of these services use accounts belonging to friends and family members, but the untapped potential is far bigger than expected.
Streaming platforms may be allowing this behavior to continue on purpose, as streaming viewers aren’t particularly brand loyal, often have access to multiple services, and aren’t yet willing to pay for more than a handful of accounts.
Yet account sharing may actually lead to broader exposure and more long-term strategic success, as these companies attract viewers with their original content and begin to carve out market share through exclusive shows that attract and hold users.
Some services are already strategizing on genres to solidify their place in the market.
They dominate entire categories where their viewers show a preference, like Disney+ users being twice as likely than average to watch children shows, and Hulu viewers being 60% more likely to watch anime.
In reality, this is causing the current streaming landscape to look a lot like TV channels did in the past, where certain services lead in a given genre. Account sharing may give viewers the opportunity to judge the quality of a service before shelling out for a subscription themselves, even if it leaves money on the table initially.
So while Hulu and Disney+ have less users than Netflix, they may actually have more staying power as their users are more engaged with their content.
15% of Hulu and Disney+ viewers spend over 5 hours a day on these platforms, as opposed to just 11% of Netflix and Prime Video viewers.
In the future, it will be important for advertisers to pay attention to the shifting competitive landscape, as it affects which audiences are drawn to which platform.
Second screening is the new normal
Americans in 2020 are distracted to say the least.
A critical mass of Americans use phones, laptops, or tablets while watching TV, so while online streaming platforms contend with one another, they also have to compete with our own attention spans.
Second-screening has become the norm in the U.S.
Over 80% of Americans admit to using a second device while watching broadcast or streaming TV, and these behaviors reach as high as 90% among Gen Z.
While this may look like bad news for advertisers, as many viewers are likely to pull out their phones during each commercial break, it simply changes the medium for these advertisers to reach their audiences.
40% of the country browse the internet and over 30% scroll through social media while watching linear or online TV. Second screening actually offers advertisers opportunities to reach viewers, who may be on streaming platforms specifically to avoid ads.
Second-screening is even more pronounced for users of multiple streaming services. 38% of all streamers use social media while watching TV, and this rises to over 50% of those who watch 5 or more streaming services.
This gives advertisers an opportunity to reach cord nevers and other streaming-first viewers in very specific ways.
For instance, 38% of all U.S. streamers use social media while watching TV, but this number reaches 53% of Disney+ viewers, while Amazon Prime viewers are the most likely to be looking up info about the shows they’re watching.
Podcasts are catching the ear of U.S. consumers
All said, advertisers can benefit from understanding more about each aspect of their consumer base’s total online experience, and podcasts are another increasingly important piece of that puzzle.
The market for podcasts has grown considerably in the past few years, evidenced most recently by a hundred-million-dollar deal between Spotify and Joe Rogan’s popular podcast. And there’s still a lot of room to grow within the segment overall.
Nearly a quarter of the country listened to podcasts in a typical month at the beginning of 2020.
And like most other shifting trends in the country, it’s driven largely by Gen Zs and millennials, as one third of both age groups listen to podcasts monthly, and 1 in 5 listen weekly.
This represents a huge opportunity for advertisers, especially since users seem more receptive to advertising in this medium than in others.
Many podcast listeners accept advertising as a way to listen for free, and just over one third of podcast listeners currently pay for a music streaming service.
Unlike viewed content, where many consumers are seeking ad-free streaming alternatives to cable, podcast listeners are more equally distributed among ad-sponsored and ad-free versions.
In this medium, the value of the content is a much larger driver for listeners than the method of accessing that content.
Barring a few deals by Spotify, there isn’t much exclusivity in listening methods, and many podcasts are posted on multiple channels at once, including YouTube.
Although there isn’t much difference between the generations, Gen Zs and millennials are slightly more likely to listen to paid, ad-free content, while Gen Xs and baby boomers are most likely to listen to ad-supported versions.
At the same time, podcast genre preferences also differ by generation. Compared to the average podcast listener:
- Gen Zs are 35% more likely to listen to comedy
- Millennials are 21% more likely to listen to TV and movie topics
- Gen Xs are 20% more likely to listen to sports podcasts
- Baby boomers are 65% more likely to listen to news and politics content.
With such stark differences in podcast preferences and an openness to advertising in this space, trends in both the exclusivity of the content and the methods of listening will be important to pay attention to in the future.
What does the future hold?
The coronavirus will no doubt lead to permanent changes in our media preferences, but the threshold for how much we are willing to pay for these various services going forward will be even more important.
Until now, our increased usage of streaming services has been driven by their low cost in comparison to traditional media. But as more services join the competition for our attention, will the last holdouts for cable TV remain subscribed, or will they join younger generations in jumping ship?
The future is uncertain. Where our attention lies, and how much we are willing to spend on our total entertainment costs will no doubt affect the offerings themselves, and as the list of our online subscriptions grow, advertisers will need to pay close attention.
