Rough Waters? Downstream Effects from the Transition to Streaming Via Smart TVs

David Tice Consultant, HUB Entertainment Research

Justin FrommHead of Insights & Thought Leadership, Samsung Ads

Justin Fromm from Samsung Ads and David Tice of HUB Entertainment Research discussed how consumer behavior is changing due to greater Smart TV penetration and usage. Streaming has become the default method of watching TV for a large swath of viewers. Streaming audiences have also increasingly become more receptive to advertising. Another important trend, Smart TV operating systems (OEMs) are constantly upgraded and made easier to use. As a result, home screen interactions continue to grow. Home screens have played a significant role in content discovery, although TV brand is a moderating factor. Home screens have even helped accelerate the rise of FAST services. In an era of constant churn, coming up in a home screen search and having an advertising model or tier have become critical to retention. Key takeaways:
  • Two-thirds of people in all TV households use a CTV to stream content.
  • Home screen usage is up 140% due to manufacturers consistently improving the user experience and helping viewers find content.
  • Nearly two-thirds of Smart TV users spend most of their time with streaming. In 2022, 70% of all viewing minutes were streamed, and 62% of viewers spent more than half of their time with streaming content.
  • In Q4 of 2023, 64% of respondents said they would rather watch ads and save money on a subscription, up 7% from Q4 of 2022. Ad tolerance has been stable over the last three years.
  • All streaming was up 22% in 2023. AVOD was up 50%, while SVOD use was down 7%. Home screen use was up 117%, and deep link use was up 59% from 2020.
  • Content discovery occurs about 50% of the time from the TV’s home screen, and 50% from an app’s home screen. This varied substantially by brand. For instance, only 38% of TCL owners (bottom of the batch) found content from the home screen.
  • While most found shows from TV promos (61%) in the last year, 17% of respondents found their favorite new show through their TVs’ home screen.
  • Advertising to at-risk audiences on the TVs’ home screen increased retention by a factor of eight.
  • In the last two years, FAST services increased 16%, which was 6% faster than the two years prior. The number one reason people used a FAST app was, they found it on their TV’s home screen (36%).

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Big Data helps solve for Fragmented TV Viewing

James AlexanderProduct Director – Measurement, Inscape

Rich GuinnessAssociate Director, Data Licensing, Inscape

James Alexander and Rich Guinness at Inscape utilized big data to uncover current trends in TV viewing. Streaming continues to cut into linear. Ad supported platforms are growing more popular. People’s thirst for new subscriptions has plateaued. Streaming viewers churn constantly, following the content they want to watch from one platform to another. Bingeing occurs on both linear and streaming, but those who use both binge the most. In today’s environment, new streaming apps grow quickly in both viewership and minutes viewed. Even though they are still a small slice of the pie, FAST apps continue to grow at a rapid pace. Key takeaways:
  • Over the last three years, there’s been a 10% increase in those whose only TV experience is streaming.
  • In Q4 2023, 6.5% of Vizio monitored TV viewers no longer watched cable or satellite, up from 4% in Q4 2022. That number is still growing.
  • The average number of native apps or all apps viewed on CTV (including YouTube) has plateaued at 5.5. This number is not increasing, which is due to churn.
  • Bingeing occurs evenly between linear and streaming, but those who have both are doing it the most. This is likely due to when people miss a few episodes of a favorite show on linear, then hop onto the streaming app to catch up.
  • FAST apps, the “new cable,” are growing rapidly. Fifteen percent of first app opens are a FAST app, and 72% of these viewers are not watching on an MVPD.
  • In their case study, 87% of SVOD users also watch a FAST app, which suggests that viewers are willing to pay top dollar for the right content—a finding that bucks current thinking.

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How We Watch: Examining the Shifting Trends in TV Habits

Mike BrooksGlobal Head of Business Development and Partnerships, LG Ad Solutions

Mike Brooks of LG Ad Solutions described the current rebalancing among CTV users leaving subscription services to embrace ad supported streaming platforms. The trend continues at a brisk pace which spells good news for advertisers. CTV offers many opportunities and as ad supported grows, more viewers suddenly become reachable. People take a significant amount of time to select what they want to watch on CTV, LG’s survey found, and are equally driven to content from their TV’s home screen as from the home screen of their favorite streaming app. This creates an opportunity to help people find content. Most viewers are also doing something on their personal device while watching, which offers shoppable TV opportunities as well as the ability to connect one’s digital and TV brands in dynamic ways. Key takeaways:
  • LG found that 93% of respondents interact with a CTV, and 80% are using some form of ad supported TV. Of them, two-thirds (63%) prefer the ad supported to the subscription model.
  • Subscription cycling is the norm with 59% of respondents saying that they are willing to cancel a subscription-based platform after finishing the content that got them to sign up.
  • The shift from SVOD to AVOD is predicted to continue: 29% of respondents are expected to remove a subscription CTV service from their household within the next 12 months, while 29% will add a free, ad supported CTV service in that same timeframe.
  • A lot of time is being spent on selecting what to watch, five minutes 42 seconds on average, their survey found, between when the screen is turned on and when a piece of content is selected.
  • People discover content equally between the home screen (40%) and the homepage of a specific app (40%).
  • LG also found that 96% are media multi-tasking while they watch TV, usually with a mobile device or laptop. Of these, 48% are engaging with social media, 46% are gaming and 42% are shopping.
  • Shoppable TV is the future: 53% of respondents said they wished all TV ads had a quick option to buy the product, 51% said they wished they could shop using their CTV and 63% said they wished they could see their local store’s inventory on their TV. Twenty-nine percent had even purchased something through their TV before.
  • Of likely voters, 65% prefer streaming to linear TV, and 82% of those streaming with ads are open to political ads outside of political content.

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