Is 2015 the Break out Year for Streaming Video on Demand?

Nielsen recently reported that US Households with Streaming Video On Demand (SVOD) spend an average of two hours and 45 minutes watching the mobile device screens, beating the homes with traditional TV, which had an average of one hour and 57 minutes. This news, along with significant SVOD content delivery announcements, indicates that 2015 could be the break-out year for OTT (over the top) delivery in the US.

In mid March, Nielsen reported that 40% of US homes had access to at least one streaming video in demand (SVOD) service, and 13% had multiple streaming services that included Netflix, Amazon Prime and Hulu Plus. That trend is likely to turn into a torrent as new offerings with break out content such as ESPN, HBO and AMC have already begun to show up in a-la-carte services. Dish Network’s Sling TV and the new HBO Now are offering content deals direct to VODS consumers for $20 and $15/month subscriptions respectively. Add to this major networks including CBS (All Access), NBC (new comedy network). Other announcements in the offing include Showtime (TBA but due for a 2015 debut) Nickelodeon’s Noggin (re-launch) and even “hold out” Fox said they will offer direct-to-consumer subscription programming (albeit so far with little details.) On the CE maker side, giants like Apple (AppleTV), Sony with its Playstation Vue (has 85 channels at $45/mo) are also contributing to this new tidal wave of streaming video on demand services.

Meanwhile, Nielsen said it’s expanding its tracking with its “Let’s Total it Up” initiative (a total audience measurement proposal) that is meant to take the group well beyond what it is already measuring to include live, DVR and on-Demand TV viewing. It said it’s prepared to measure viewing on computers, smartphones, and tablets. Measuring all content, especially SVOD content, will help Nielsen continue to offer the data advertisers need to measure effectiveness of ad placement and dollars spent.

In a recent web pitch to the industry, Nielsen said “Let’s work together to evolve the ratings to reflect the total audience and give credit where credit is due – for every view, on every screen”. On the Nielsen landing page dedicated to the new initiative that began in December 2014, senior VP Dounia Turrill at Nielsen said, “The growing penetration of new devices and the popularity of subscription-based streaming services, time-shifted and over-the-top viewing – as well as cord-cutting and cord shaving – are fundamentally changing the TV industry”.

We’ve also hit a tipping point in the SVOD audience especially where advertisers are gunning for younger users. The latest Nielsen Audience Tracking report confirms that 25% of streaming audiences are under age 35 (a full six points better than TV-only homes) and those with SVOD have a 10% edge in children viewers, with 45% claiming that children were present versus 35% of traditional TV-only households. Finally, SVOD subscriber homes also claim 50 minutes more time spent consuming video on TV-connected devices (tablets, pads, smartphones) than non-traditional TV homes.

Finally, in the traditional Pay-TV world, over the past three years “Cord cutting” has moved from non-existent (total denial), to an inconvenient truth, advancing now to a point where, CBS President and CEO, Leslie Moonves, was recently quoted in Variety saying, “You are getting the cord-cutters, people who want mobility and superfans”. “The cord-cutters can’t be ignored.” The report concludes, “those (content companies) in the know might as well disrupt themselves, lest they risk being out of the game entirely in the new generation”. And that says it all. – Steve Sechrist