Study: 55% U.S. Smart TV Penetration Changing Pay-TV Paradigms In 2022
Fifty-five percent of U.S. homes with broadband service now have a smart TV, making integrated sets the default platform for streaming content among viewers, according to new market research from Parks Associates.
The firm’s new “OTT Streaming Trends To Watch In 2022” white paper predicts smart TVs will continue to become entrenched as the default connected platform in the home over the course of 2022.
Contributing to this, The Parks study suggests, is the fact that consumers are increasingly interested in having all their entertainment available on a single device while at the same time smart TVs have become more affordable, and easier to use through improved and more personalized user interfaces (UIs) that help viewers quickly find programs of interest to them.
“Rapid changes in the market over the past two years, combined with continually shifting customer preferences, have forced service and device suppliers to adjust and adapt on an almost daily basis,” stated Eric Sorensen, Parks Associates senior contributing analyst. “The standard in service now is to deliver desirable content so that consumers can view it when, where, and how they want it. Service providers, both conventional and online, will have to continue to adjust as consumer demands continue to evolve.”
Meanwhile, the trend continues to have a negative impact on subscriptions to traditional pay-TV services, and as a result cable/DTH satellite/telco TV service providers will be normalizing the trend of subscriber churn into their business models.
The study states that the average churn rate among these services in 2020 was 40% and that grew to the current 45% rate over the past year.
Parks found that U.S. streamers today are typically subscribing to one or more foundational services including Netflix, Prime Video, Disney+, or Hulu, which they then supplement with three additional services providing some level of unique or differentiated content.
These supplemental service subscriptions are generally more volatile, as viewers will quickly drop them from month to month once remaining viewing choices appear less compelling and of lower value to them.
“We also expect the traditional business models for movie windowing releases to erode more in 2022,” Sorensen said. “The box office will regain some of its strength, as ‘experience’ releases like sci-fi and action-adventure will continue to draw people to the theater, but for many films, movie studios generally benefit from bypassing exclusivity and releasing through multiple channels, including theaters and direct-to-consumer. In 2022, we will see more of this hybrid windowing strategy and experimentation.”
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By Greg Tarr
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