Bundling and Balancing: TiVo’s Video Trends Report Finds Consumers Are Onboard With Industry Consolidation Overhaul
October 01 2024 - 2:00PM
Business Wire
While the number of total services declined,
consumers support bundled services over new SVOD pricing
Today TiVo, a wholly owned subsidiary of entertainment
technology company Xperi Inc. (NYSE: XPER), found in its Q2 2024
Video Trends Report that consumers are pulling back on
entertainment spending as the industry works to rebalance and
bundle its current entertainment offerings.
In 2020, entertainment consumption and spending surged as the
pandemic limited consumer activities outside of the home. Now the
pendulum is swinging back as consumers are hit with ongoing
economic headwinds and a steady cadence of out-of-home
entertainment opportunities. While daily viewership hours haven’t
noticeably dropped in the last year, the average total of
entertainment spend is down $30 year-over-year, and the average
total number of services used is back to 2022 levels, when much of
America was beginning to gain relief from the pandemic — coming in
at 9.1, a drop from 10.9 in 2023. This indicates that while
consumers are cutting back on their spending, they haven’t stopped
enjoying entertainment. Instead, they have found a way to
supplement their favored pay TV and broadband services by turning
to ad-supported services and pushing major media companies to
bundle services or risk losing customers.
With this shift in viewership and spending, major media
companies that have primarily focused on subscription video on
demand (SVOD) services as their main customer attrition point in
the past have now realized the power of providing customers with
their ad-supported video on demand (AVOD) and free ad-supported
streaming TV (FAST) services as a complimentary package or bundle
to their SVOD service. Of those who use SVOD services in 2024,
about 64% of respondents said they utilize the available
ad-supported tiers, an increase of 16 percentage points from Q2
2023. Combined with the nearly 62% of respondents who stated that
they were “likely” or “much more likely” to keep their broadband
service if their provider bundled additional streaming services
with internet, indicating that people are looking for ways to save.
This new business model has proven successful for entertainment
companies as FAST subscriptions are now finding their footing in
the entertainment landscape, no longer being seen as a subscription
downgrade but as a bonus.
Consumers are also leaning into this new business model with an
increase in ad tolerance, proving that if service providers find
the right balance of paid vs. ad-supported services, consumers are
more than willing to watch ads if they believe they are receiving a
better bang for their buck. Even tier one advertisers are finding
this to be true as advertisement quality on FAST and AVOD services
— something that has been low-quality in the past — is also
improving, helping to make ad watching less of a bother for
consumers.
“In the past, we've seen over-the-top (OTT) service providers
trying to assess the limits of consumer entertainment spending, and
they are now seeing where consumers are willing to draw the line,”
said Scott Maddux, vice president of global content strategy and
business at Xperi. “Now, the same OTT service providers are
starting to see the promotional and monetary benefits of creating
bundles with their subscription video on demand, ad-supported video
on demand and free ad-supported television service options, helping
to reduce churn and, more importantly, keep their customers under
one roof rather than spread across multiple broadband and pay TV
services, allowing content providers to monetize across the full
spectrum from subscription to ad-supported.”
Additional TiVo Video Trend Report Highlights
- The discovery dilemma: Nearly 85% of respondents shared
that they are prone to browsing before they land on a show or movie
to watch, and almost 73% shared that they go into more than one app
in a typical viewing session to settle on an entertainment
option.
- Organic recommendation is best: The relevance of content
recommendations has gone down across the board, with respondents
still finding organic recommendations to be more relevant than
other forms of recommendations. Top methods of discovery continue
to be word-of-mouth/recommendations from friends (50%) and
commercials or ads that run during other shows (40%).
- Social video usage shifts slightly: Almost 80% of
respondents watch video via their social media and/or
user-generated content networks; this is a slight decline from 85%
in the spring of 2023. Top video sources include YouTube followed
by TikTok.
- Amazon rules TVOD: The share of pay TV subscribers
utilizing transactional video on demand (TVOD) services has
declined substantially, from 54.3% in Q2 2023 down to 45.7% this
year. Broadband-only subscribers’ TVOD usage has remained
consistent, at 41.3%, compared to 41.9% in Q2 2023. Amazon Prime
still leads as the top TVOD service with YouTube following in its
footsteps.
Find more information from the latest Q2 2024 Video Trends
Report here.
TiVo is also an expert in video trends and TV viewership data.
TiVo TV Viewership Data includes second-by-second data captured
from set-top-boxes within households across all 210 DMAs in the
U.S. The data reflects both live and time-shifted viewership
information which is the cornerstone of TiVo’s expertise in TV data
processing. Find more information about TiVo’s Viewership Data
here.
Methodology
Since 2012, TiVo has surveyed consumers to uncover key trends
relevant to TV providers, digital publishers, advertisers, and
consumer electronics manufacturers. The latest TiVo Video Trends
Report surveyed 4,490 adults 18 and older living in the U.S. and
Canada during the second quarter of 2024 (3,500 U.S., 990 Canada).
In addition to identifying and analyzing key trends in viewing
habits, the TiVo Video Trends Report provides insight to consumer
opinions regarding Subscription Video on Demand (SVOD),
Transactional Video on Demand (TVOD) and Advertising-Based Video on
Demand (AVOD) providers, emerging technologies, connected devices,
over-the-top (OTT) apps and content discovery features, including
personalized recommendations and search.
About TiVo
TiVo brings entertainment together, making it easy to find,
watch and enjoy. We serve up the best movies, shows and videos from
across live TV, on-demand, streaming services and countless apps,
helping people to watch on their terms. For studios, networks and
advertisers, TiVo targets a passionate group of watchers to
increase viewership and engagement across all screens. TiVo is a
wholly-owned subsidiary of Xperi Inc. Go to tivo.com and enjoy
watching.
About Xperi Inc.
Xperi invents, develops, and delivers technologies that enable
extraordinary experiences. Xperi technologies, delivered via its
brands (DTS®, HD Radio™, TiVo®), and by its startup, Perceive, are
integrated into billions of consumer devices and media platforms
worldwide, powering smart devices, connected cars and entertainment
experiences, including IMAX® Enhanced, a certification and
licensing program operated by IMAX Corporation and DTS, Inc. Xperi
has created a unified ecosystem that reaches highly engaged
consumers, driving increased value for partners, customers and
consumers.
©2024 Xperi Inc. All Rights Reserved. Xperi, TiVo, DTS, HD
Radio, DTS Play-Fi, Perceive and their respective logos are
trademark(s) or registered trademark(s) of Xperi Inc. or its
subsidiaries in the United States and other countries. IMAX is a
registered trademark of IMAX Corporation. All other trademarks and
content are the property of their respective owners.
SOURCE: Xperi, Inc.
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version on businesswire.com: https://www.businesswire.com/news/home/20241001762870/en/
Xperi Media: Allyse Sanchez, Xperi
allyse.sanchez@xperi.com
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