Study Sheds Light into the Rise of OTT and the Possibility for New Revenue Models for Leading Providers Apple, Netflix, Hulu and Amazon
OpenX announced the findings of a nationwide survey conducted by The Harris Poll, showing a massive consumer shift toward OTT video content consumption is well underway. With the majority of American adults now using at least one OTT service, and most subscribing to three separate platforms to stream content, the new study highlights how OTT has become the primary video content channel for nearly all age groups in the US today.
The new report, which offers the most comprehensive assessment of the OTT consumer completed to date, with insights from more than 2,000 US adults, also uncovers new opportunities for marketers to expand their ad strategies beyond traditional TV buying to include targeted and effective OTT user engagement. Despite the report’s finding that OTT viewing has surpassed live television for many demographics, only $2 billion of the $70 billion spent on television advertising in the US in 2018 was spent on targeted, addressable TV ads.
Read More: More Streamers Prefer Local Over National Ads According to New Survey
Key highlights from the new study include:
- OTT is now mainstream. A majority of US adults now stream OTT content daily, and they stream a lot. OTT Millennials for example watch more than twice as much streaming content as they do linear cable television.
- OTT consumers are mobile-first. On average, OTT consumers use their mobile devices for more than 6 hours a day and watch more than two hours of mobile video each day. Nearly one-third now say screen size has no impact on how long they watch or the type of content. Millennial OTT users stream more video content on their mobile device than they do on their TVs.
- Password sharing and multiple screens complicate marketing strategies. One-third of OTT consumers share passwords and the average OTT user has three different connected devices that they stream video content on. This sharing and fragmentation requires marketers to take more comprehensive approaches to delivering 1:1 experiences in OTT environments.
- There is room for different business models. Streamers are about evenly split between wanting an ad-supported or subscription model. A slim majority of viewers prefer a cheaper or free service supported by ads rather than a more expensive ad-free service.
- OTT ads work. 72% of streamers recall seeing OTT advertisements and 40% have “paused to purchase” – pausing the streaming content they were watching to learn more or make a purchase, creating significant new opportunities to deliver both lean forward and lean back consumer marketing strategies for OTT.
“Consumer attention is shifting significantly to OTT channels and this sea change in how we consume video content represents the most significant evolution in media consumption since the introduction of the smartphone,” said Dallas Lawrence, chief brand officer at OpenX. “More than half of all Americans now use an OTT service, and they stream a lot – over two and a half hours every single day. With OTT now capturing a significant percentage of total consumer video time, yet less than five percent of total TV ad spend, an enormous shift in how marketers diversify their advertising strategy is on the horizon. This research clearly signals that the OTT era has arrived, and with it, new and disruptive opportunities for marketers to elevate the power and efficacy of video advertising beyond anything we have seen before.”
