SAN JOSE, Calif.—New research released by TiVo finds that the average number of video services used by consumers is approaching double-digits for the first time in history, with consumers now watching an average of 9.86 video services compared to 8.8 a year ago.
The new TiVo Video Trends Report also found that ad-supported video on demand (AVOD) services or free ad-supported streaming TV (FAST) services are being much more widely used as consumers look to stretch their entertainment budgets.
The report found that AVOD services account for 32% of the overall share of video services used by consumers in 2022, compared to 26% in Q4 2021; and the average consumer is now using three ad-based video on demand services.
While consumers’ willingness to pay for ad-free programming has been an advantage to subscription streaming services in recent years, that trend is now giving way to increased adoption of ad-supported video fueled by a proliferation of free content services or introduction of subscription tiers, the report explained.
At the same time, a rich-content first experience remains a priority when it comes to discretionary spending. About 7 in 10 of respondents said their video entertainment spending is a moderate to high priority.
Despite inflation and financial pressures, only 25% of respondents reported reducing their entertainment spending. Three in 10 consumers surveyed said they had purchased a smart TV between Q4 2021 and Q2 2022.
“Entertainment, and specifically video content, is very much a priority for consumers, but if they can get it at a lower-cost, or free, consumers are demonstrating a growing tolerance for more ads as part of the content they consume,” said Walt Horstman, senior vice president, Monetization, TiVo, a part of Xperi, Inc.
Addition finding from the TiVo Video Trend Report include:
- Hopping around: 8 in 10 consumers said they wish their paid service offered an ad-supported free option, but a quarter (24.3%) of AVOD users admitted to only spending three months watching a new AVOD service until moving onto a new option. Moreover, pay-TV subscribers admitted to hopping between AVOD services at more than twice the rate of broadband-only users.
- Too many options: Finding what consumers want to watch continues to be the number-one pain point for the vast majority, as services and content proliferate. Voice control is more popular than ever, with three-quarters (74%) of respondents who have access to voice search technology using it to help find content faster.
- In the neighborhood: 59% of survey respondents consider local content to be important or very important, with local weather (68%), news (65%) and sports (36%) topping their list of tune-in priorities. Pay-TV subscribers spend a quarter (24.6%) of their viewing time on local content, while broadband-only subscribers spend 16.2% of their viewing time watching local content.
- Cord-cutters come back: 25% of pay-TV subscribers are reported “Pay-TV Revivers” who once cut the cord and resubscribed. TiVo’s research team points out that pay-TV continues to have a significantly lower churn rate than subscription video on demand (SVOD).
More information from the latest Video Trends Report is available here.
