The video entertainment market is in a perpetual state of flux. The disruption that early streaming services Netflix and Hulu brought to the market continues to be a source of change. Traditional pay-TV providers have suffered a dramatic loss in subscriptions within the last ten years as streaming services became more popular among consumers. That popularity led to an explosion of new entrants into the streaming market and forced legacy pay-TV providers to evolve their services or risk losing more business.

Today, the video entertainment market is drastically different than it was five years ago, will continue to evolve, and is already restructuring again. Advertisements, for example, are experiencing a revival as prices for ad-free tiers rise relentlessly and profitability becomes more of a concern.

Streaming pay-TV, or virtual multichannel video programming distributors (vMVPD), like YouTubeTV are streaming services employing both subscription and advertising business models. Parks Associates data shows relatively low churn rates for streaming pay-TV and high user satisfaction. Parks Associates data also finds that 56% of US internet households subscribe to a pay-tv service, down from 73% in 2020, but the percentage of households now streaming a pay-TV service has doubled in the past 3 years.

The rise of streaming pay-TV and free ad-supported television (FAST) channels demonstrates how consumers still value the linear model. Legacy pay-TV may show a decline overall but is still an important piece of a household’s entertainment setup.

Streaming pay-TV in particular is a category to watch. As the chart above shows, while legacy pay-TV subscriptions declined, streaming pay-TV services rose. Households may be cutting the cord but are not ready to abandon pay-TV altogether. With no contracts or hardware required from most providers, consumers are less resistant to signing up for a streaming pay-TV service, versus a traditional pay-TV service.

The above insights are just one of many included in Parks Associates’ recent report, Video Services: Shifting Demand, which reveals how the video landscape has changed in recent years and is changing again. The report includes historical data on adoption, satisfaction, and churn for pay-TV and streaming video services, including vMVPD services. The video market is at the mercy of consumer choice, but the data revealed in this report can inform businesses about where consumers are choosing to spend their time and money so they can adapt successfully in this highly competitive market.

Parks Associates will be sharing more research and insight into the video entertainment markets at Future of Video, Nov 14-16, at the Marina del Rey Marriott in California. Register Now.