Reports

Hub’s annual Decoding the Default study tracks the default source of content, and default devices, viewers turn to first when they’re ready to watch TV content.

Compared to just a few years ago, there are an abundance of streaming options for viewers in addition to traditional TV sources such as over-the-air or cable TV. The importance of viewers’ default choice – and the trends showing a shift away from traditional TV sources to streamers – is the assumption that their default is the source they’ll be most loyal to; their TV “home base.”

Not only do we see a trend towards streamers overall, but changes within the streamer space. Last year’s study showed major SVOD services like Hulu, Amazon Prime, Disney+, and Max were gaining ground on Netflix. Newer streamers like Discovery+, Paramount+, and Peacock may also be eroding Netflix’ previously insurmountable lead as default. And are the industry’s newest darlings, FASTs, making any headway?

What’s certain is that we’ll come away from this year’s wave of Decoding the Default with a strong understanding of how TV consumers prioritize the ever-growing number of TV sources at their disposal.

Over the past few years, we have seen an increasing number of video providers start to offer ad-supported tiers within their menu of streaming options. What seemed to be unthinkable only a few years ago has become a reality with even Netflix and Disney+ adding lower cost ad-supported tiers to their offerings. These developments are a clear signal that providers believe subscriber growth will be contingent on giving budget-conscious consumers less costly options.

In past waves of this study, we have consistently observed such attitudes among consumers. A majority of viewers have indicated that they would choose an ad-supported version of a streaming service over one that is ad-free if they can save money on their monthly subscriptions. Not only that, services that have added a lower-cost ad-supported tier are now more attractive to a segment of non-subscribers.

The other constant is that viewers value content that they love over an ad-free experience. And the results also indicate that when properly integrated into the content, advertising can provide better value and even enhance the experience.

In this fifth wave of TV Advertising – Fact vs. Fiction, we will continue to track use, viewing behaviors, and perceptions of ad-supported TV.  We’ll explore the interplay between advertising, cost, and content, and how they inform platform choice:

• What advertising formats and features offer the best experiences in the minds of consumers?
• How does advertising impact satisfaction and perceptions of value?
• What is the role of content when choosing between ad-supported and ad-free platforms? How does original and exclusive content inform consideration?
• What impact does tiered service have on platform choice, retention, and subscriber growth?
• For services that have added ad-supported options, what has been the rate of uptake? Have current subscribers downgraded to the less costly tier? What is their level of satisfaction?

In the end, the goal of the study is to help TV service and content providers offer an ad experience that will maximize viewer satisfaction, engagement, and loyalty.

The TV set continues to evolve, with four in five homes now having a smart TV, and with smart TVs accounting for three in five TV sets. With streaming established in almost all American homes, the next battle is over who is the gatekeeper: the operating system (OS) of the manufacturer of the smart TV or of the streaming media player?  The battling OSs have the potential to influence viewer behaviors as program discovery and selection, as well as behind-the-scenes business aspects such as who owns viewing data, and who gets the bigger slice of the ad sales pie. But do consumers care at all about the brand or OS of their set or streaming device?

The fifth year of this report continues to cover the current and emerging capabilities of TV sets, how they are used by viewers, and consumer attitudes towards “TV” in general. With data for many questions going back five years, we’ll be able to look at long-term trends to provide additional insight into many of these topics. The report will provide guidance to all stakeholders in the “TV value chain” (device manufacturers, content producers, content distributors, and advertising sellers and buyers) to help improve TV-related business outcomes.

Roll the calendar back a few years and the streaming revolution was bringing the “a la carte” dream to consumers sick of being stuck with 500 cable channels to get the few they actually watched. The promise of getting to choose what you wanted to pay to watch, with easy service pauses or cancelations. Which was fine when Netflix, Hulu, and Amazon Prime were the only three major streamers.

Now, consumers wanting to build their own bundles have to choose and manage subscriptions from a dozen or so major for-pay streamers. And choose between ad-free and ad-supported tiers. And maybe tiers that offer 4K content or extra out-of-home users. And FAST services that are proliferating like rabbits, even if much of what each offers is licensed to multiple other FASTs. Oh, and don’t forget traditional MVPD television service, still found in a majority of American homes.

So much for the new world of streaming making things easier for TV viewers.

Hub’s Monetizing Video study has been tracking how consumers have been navigating changing pay-model alternatives since 2018. The study explores which services and features offer the strongest value, as well as the current amount consumers pay for TV services compared with what they consider to be a “reasonable” amount or a “maximum” amount.

The study is designed to better inform companies about what makes one provider or service have greater perceived value to consumers than others.

As we found in the first wave of “Battle Royale”, viewers are consuming video from more sources than ever.  But this is coupled with even greater expansion across other kinds of entertainment content like social media, gaming, music or podcasts.  This creates more competition for consumers’ disposable time and spending.  It also makes the process of managing individual platforms and subscriptions even more complicated.

Consumers’ desire for greater simplicity isn’t limited just to video.  So, this complexity is an opportunity for companies that can simplify things by offering a bundle that extends to *all* kinds of entertainment, as well as services beyond entertainment.  (Evan Shapiro of ESHAP TV has coined a name for this we think is appropriate: “lifestyle bundle”).

Most major pay TV operators already bundle traditional pay TV and streaming access with internet, wireless phone plans, or home security.  Amazon already offers video, gaming, music, and every other product imaginable under one roof (Amazon Prime).  Other big companies are following suit:

• Microsoft’s purchase of Activision enables them to bundle IP like Call of Duty to their Xbox distribution system and GamePass subscription.
• Their advertising partnership with Netflix could lay the groundwork to expand video content available through Xbox (by bundling Netflix with GamePass, for instance)
• This week we learned that Walmart has met with Disney, Paramount and Comcast to discuss bundling video with Walmart + memberships
• In the UK, Sky TV offers a monthly subscription bundle that combines video access with a new TV set

These macro bundles will change where consumers get their content, the way they choose which pieces to consume, and even what content gets to be part of their consideration set in the first place.

This wave of “Battle Royale” will trend key findings from the first study, but we’ll also dig more into the future of bundling, and how your company could position itself to be where those decisions are made.

Just when TV consumers thought some stability had come to the streaming space, they have faced another rush of change. Netflix and Disney+ launched ad-supported tiers. Peacock has turned off their free tier to any new subscribers. And everyone’s waiting for Netflix to launch their crackdown on password sharing later this year – a behavior they once encouraged as a marketing cost. Today’s consumers, already nervous because of inflation, now have to choose from an even more confusing variety of services.

In light of this, this year’s Best Bundle study will continue to explore how TV consumers are adjusting to this constantly evolving TV/streaming space. How are consumers discovering the bundle of services to find the combination that best meets their viewing needs? The study will identify the most common configurations of platforms: in particular, the extent to which consumers are bundling linear vs on-demand services, ad-supported vs. ad-free services, subscription vs. free streaming services, etc. And importantly, we’ll explore consumers’ perceptions of media, and 3^rd party tech+media, bundles.

It is only a slight exaggeration that in today’s world, every brand is a media brand. Nearly ubiquitous broadband access in or out of the home means almost every device Americans use –  smart TVs, smart doorbells, smart speakers, smartphones, exercise bikes, even beds –  is figuratively wired into the internet. And if the device isn’t serving up media itself, it’s probably feeding the data stream that algorithms use to deliver your media and advertising.

The traditional concept of “primetime” has become untethered from time, device, and activity. Media delivery and data collection never takes a break, whether consumers are watching a TV at night, using a smartphone during their commute, listening to a smart speaker while making lunch, or recording their exercise on a smart watch before breakfast. Understanding what consumers own and use is more important than ever for the ever-increasing list of stakeholders in the media world.

2023 marks the fifth year of Hub’s Entertainment+Tech tracking study. As in previous years, the Connected Home report will provide a broad look at entertainment and smart home technology in US households, as well as their intentions to purchase new media tech and how they approach those purchases. With historical trends going back to 2019, our data reveals what devices are trending hot – or cold – in today’s media technology environment.

This study will continue to provide media producers & distributors and device manufacturers insights to help them make better informed strategy and investment decisions.

Since 2019, Hub’s Evolution of Video Branding study has tracked awareness and perceptions of brands across the TV ecosystem.

The novelty of streaming services has worn off, with almost all Americans using at least one and most subscribing to multiple streamers. At this point, all media companies of note have launched their own pay or free service, and even newcomers like TV set manufacturers have thrown their hats in the ring with their own “OEM FASTs.”

The most important goal of providers is no longer to drive awareness, but to create differentiation.  With so many options, providers must now focus on how to stand out from their rivals: exclusive content, library content, stacking series based on IP or creators, bundling with their other lines of business, or offering multiple subscription tiers.

In 2023, the Evolution of Video Branding study will continue to track not just awareness of streaming services, but also which service or brand attributes have had the strongest impact on consumers’ perceptions. Where available, trends with the previous four waves of the report will be shown.

While the focus on new media technology is often about what’s in the living room or kitchen – streaming to TVs, smart speakers, and so on – there is another revolution happening in the garage. Cars, SUVs, and trucks have seen a revolution in their media tech as well. Old tech like broadcast radio and CDs have often been replaced by the music and audio apps found on consumers’ smartphones, which are now plugged into the car’s media systems. Kids who used to watch DVDs on in-car systems now often are using tablets with downloaded content, or even in-car hotspots.

Similar transitions are seen in other aspects of consumer travel, such as commuting, where digital options are supplanting analog media like newspapers and magazines – or providing new options for video and audio on-the-go.

This new report will explore how people use media while “on the move’ – with a particular emphasis on in-car usage, but also including other mobile use such as while commuting or traveling.

The report will look at the high-tech media world inside Americans’ cars, trucks and SUVs, including the presence and use of new media tech such as Apple CarPlay or Android Auto, voice commands, in-car Wi-Fi hotspots, and seatback screens as well as traditional built-in audio systems. It will also cover topics such as media sources people are more likely to consume in the car; what drivers want in entertainment versus passengers; and how kids drive in-car media choices. Additionally, we’ll look briefly at other out-of-home mobile use, such as while commuting (bus/train/subway) or traveling (train/airplane).

This report will provide guidance to media stakeholders better understand consumers’ use of media on the move to help guide business tactics and strategic investments.

The annual  Video Redefined study takes a step back from our typical focus on consumption of TV and movie content, and tracks use of the ever-expanding array of other types of video content at consumers’ disposal.

Past waves of the study have tracked the growing popularity of YouTube influencers, platforms like TikTok, and content categories like podcasts, livestreaming, and mobile videogames. We’ve looked at how consumption of non-TV content varies by consumer segment, we’ve identified the most common use-cases, and we’ve tracked consumers’ reaction to advertising on non-TV video platforms. And of course, one of the main goals of the study has been to measure the impact that consumption of this content is having on traditional TV viewing.

This year’s wave of the study will cover all of the above, but it will also measure adoption of a brand-new tool in the streaming  TV arsenal: the just-launched ad-supported tier of Netflix. The timing of the new tier’s introduction and of this wave of the study will allow us to take a deep look at early adopters of the new tier, including the consumer segmetns most likely to have signed up, the number of Netflix ad-free subs who have made the switch (or intend to make the switch) to ad-supported, the number of brand new Netflix subscribers lured by the lower priced plan, and the extent to which the new plan reduces the number of subscribers who churn in and out of Netflix as TV shows come and go.

In the end, the study will help our TV industry and advertising clients better understand the competitive challenges posed by non-TV content, how those challenges are evolving as new platforms emerge and gain popularity, and what strategies will be most effective in addressing the competitive threat. At the same time, the study will also point to opportunities for TV firms to join the non-TV fray, by developing their own offerings (e.g., Netflix’s foray into gaming) that stretch beyond their traditional content categories.