42 Percent of U.S. Homes Use AVOD & FAST Services

A new study from Parks Associates has found that 42 percent of U.S. homes now use an AVOD or FAST service, with SVOD penetration at 71 percent.

Parks also found that 18 percent of homes use a TVOD service. Almost half of all homes—46 percent—use five or more services. Average spending, however, has dropped from $80 a month six months ago to $63.

“Competition is fierce, and the pressure is on to offer unique, immersive content and to have that content available on multiple platforms,” said Elizabeth Parks, president and CMO of Parks Associates. “Consumers today are fatigued by the disjointed surplus of streaming options available.”

Parks continued: “There is a divide in household sentiment towards the cost of streaming services. About an equal number of households agree as disagree that they are spending too much on streaming services. Those who agree they spend too much are likely entertainment enthusiasts who subscribe to and use more services. However, these households may look to cut back soon or embrace more services with advertisements as prices continue to climb higher.”

A separate white paper from the company, produced in partnership with JW Player (JWP), found that 67 percent of consumers are watching social video, 50 percent consumer free ad-supported content, 33 percent use pay TV and 14 percent have an antenna for free-to-air broadcaster. Further, 65 percent are watching content on their phones.

“The video streaming business is in a transformative stage,” said James Burt, senior VP of broadcast solutions for JWP. “It’s full of requirements that change to align with shifts in viewer consumption trends. Streaming management is also technically complex, with broadcasters struggling to balance operational efficiencies with innovation and growth. Yet there are more viewers using digital platforms to consume content than ever before. Streaming companies must review their technology, operations and productivity and make adjustments to create economies of scale and improve ROI.”

“In the early days of streaming, services were focused on building subscriber bases through low fees, ad-free programming, and high-quality original content,” added Sarah Lee, research analyst at Parks. “Now, to fully monetize these efforts, they need to deliver a consistent, high-quality viewing experience that goes across all platforms.”