Millions of consumers are cutting the cord in favor of over-the-top television services, like Hulu, Netflix and Amazon Video. Not surprisingly, cable and satellite providers have taken notice of this OTT growth. Recently, Charline Ergen, CEO of Dish, acknowledged that we’ve hit a tipping point. As part of her 2017 Q4 earnings announcement, Ergen commented: “OTT services are becoming a direct replacement for cable and satellite”.
You might think OTT growth is being driven primarily by Millennials, but the data may surprise you.
If you think OTT growth is all about Millennials, think again
It’s true that Millennials were among the first to cut the cord and embrace OTT. But now, thanks to increased ease of access, all generations are welcoming OTT into their homes. GfK MRI’s latest “Cord Evolution” study looked at the streaming attitudes and behaviors of 10,000 people across the United States. Here’s what they found:
- The average age of “cord cutters” (people who have eliminated cable subscriptions) is 43 (accounting for 8% of the total U.S. population)
- The average age of “cord nevers” (people who never had cable) is 34 (accounting for 9% of the total U.S. population)
- Millennials account for 35% of cord cutters and 50% of the cord nevers
Historically, the largest traditional TV viewership has been among adults, aged 50-64. But research shows that in Q1 2017 – for the first time – traditional TV viewing has declined among that same age group. Here’s what Nielsen’s data shows:
- There has been a 45% increase in online video consumption by adults aged 50-65
- There has also been a 36% increase in online video consumption by adults aged 65+
These numbers are noteworthy to players in the online video sector who have been primarily targeting Millennials. Online video providers and vendors, if they’re smart, will expand their campaigns to target older users, running videos on their TVs as well as other connected devices.
OTT is redefining the concept of “TV”
What’s perhaps the most interesting about OTT is how it’s changing the definition of “television” itself:
- 50% of cord cutters and 43% of cord nevers say that “TV is anything you watch on a TV set.”
- 29% of both groups say that “TV is anything you can view on any”
- That 29%, as you may have guessed, is expected to trend up rapidly over the next few years.
OTT growth isn’t exclusive to the U.S.
S&P Global Market Intelligence recently conducted a consumer insight survey and found that about 11% of all U.S. households have cut the cord. But this percentage is bested by a number of countries. In Italy and the UK, 13% of households have cut the cord. In South Korea, 12%, and in China, 15%. In China, the highest percentage of cord cutters are younger, yet in Europe, older consumers are cutting the cord in favor of OTT.
OTT is expanding beyond the world of entertainment and sports
The entertainment, news and sports industries have most openly embraced OTT. But corporations, government agencies and associations are also starting to take advantage of this new platform as well. In 1993, cable magnate, John Malone, famously forecasted that there would be 500 channels of cable. He was right, with one exception: with OTT, there are no limits to the number of channels.