DALLAS—New data from Parks Associates highlights some of the difficulties facing both pay TV operators and streaming companies going into the new year.
While pay TV video services were once available in over 80% of all U.S. homes, the latest update of Park’s Streaming Video Tracker reveals the ongoing adoption of streaming services has eroded the exclusive reliance of pay TV for video content to the point where just 5% of US internet households now only have a pay-TV service.
However, the data also indicates that streaming services face their own problems with fickle consumers who jump or churn in and out of streaming subscription.
In the newest Parks data, the average annualized industry churn rate for streaming services is 50%, meaning many streaming services are also struggling to keep their customers.
"Sixty-five percent of internet households have a smart TV," said Eric Sorensen, director, Streaming Video Tracker, Parks Associates. "This platform interface serves as the entry point for many households to their content services. Competition for attention is extreme, while the continued rollout of the ATSC 3.0 standard gives viewers even more options, so in 2024, we will see increased consolidation, mergers, and acquisitions as all providers must find ways to innovate alongside the greater emphasis on profitability."
Researchers from Parks also noted that traditional telcos faced with pay TV sub losses are exploring new ways to get their products in front of streaming consumers with services such as Cox's Neighborhood TV. Cox is positioning this hyperlocal streaming service to expand its influences in its communities and as a gateway to attract consumers to its phone, internet, and TV bundle. Station groups such as Sinclair and Hearst have also launched local streaming services to leverage the consumer desire for local content in this age of streaming.
"The hyperlocal approach clearly attracts interest from consumers," Sorensen said. "With the increase of AVOD business models, consumer adoption indicates that relevance is a key factor, namely consumers are likely to turn off services if the service and messaging are repetitive and irrelevant to them. Even manufacturers recognize the need for personalization—for example, LG will be displaying its MyView smart monitors at CES 2024, which the company designed to deliver a personalized experience to the user."
The research firm will host the 18th annual CONNECTIONS Summit: Performance and Profits: Smart Home Strategies at CES on January 9, 2024, at the Venetian, Level 4, Marcello 4404, from 9:00 AM- 5:00 PM in Las Vegas.
CONNECTIONS Summit features six executive sessions and a fireside chat on "Smart Home Innovations" with Mark Benson, Head of Samsung SmartThings U.S., Samsung SmartThings. CONNECTIONS Summit concludes with a networking reception sponsored by Cox Communities.
