More Than Half of All Consumers Choose OTT Over Pay-TV, Study Finds

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The shift toward over-the-top (OTT) video has accelerated. According to a new study by the research firm Hub, 56 percent of consumers now saying that they use streaming platforms over pay-TV services to watch their favorite content.

The study reflects an overall shift in the entertainment industry as cord-cutting accelerates. So far, it is estimated that more than 1 million consumers have cut ties with their pay-TV provider in Q3 of this year alone.

After leaving their cable provider, a majority of consumers are turning to Netflix for their daily intake of entertainment. Hub found that 32 percent of consumers use Netflix to watch their favorite show, making it the top source for watching their favorite programs, over pay-TV providers (26 percent), according to the report.

“Whether or not Netflix’s massive investment in content makes financial sense for the company, it’s clearly been successful in one respect,” said Peter Fondulas, principal at Hub and co-author of the study. “The platform has managed to become more of a home for favorite shows than all other linear networks combined.”

For cord-cutters, the study found that word of mouth/social media is the number one way viewers say they found out about a show (35 percent), while 29 percent learned about the show through advertising. For the average pay-TV viewer, the numbers are flipped. For shows watched from the set-top box, advertising dominates as the way consumers found out (54 percent), while only 20 percent learned about shows via word of mouth or social media.

“These findings illustrate how content that’s available online spreads more efficiently – from person to person, rather than being driven by marketing spend,” said Jon Giegengack of Hub. “So far this has mostly benefitted streaming platforms. But it also suggests that making at least some episodes available on demand is an effective way to help new linear shows cut through the clutter.”

Hub’s “Conquering Content” study was conducted among 1,699 U.S. consumers with broadband, who watch at least 1 hour of TV per week. The data was collected in October 2018.

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