People are more in control of the content they consume than ever before. Mobile devices and low-cost streaming services have made Internet TV and radio highly accessible and attractive alternatives to traditional options.
Before, television networks largely decided what and when viewers watch TV. Today, Internet TV and video streaming services like Netflix, Hulu and Amazon Prime give more control to the viewer. There is a huge opportunity for brands and businesses to advertise and create content for online consumption. There are a few essentials to know about online TV and radio options before diving in.
Video remains one of the most engaging and profitable sectors. According to PwC, most revenue from the Entertainment & Media industry is generated through video. Globally, close to $420 billion was generated through video subscriptions and advertising in 2015. How people are consuming video content is changing, though.
Young viewers now consume more Internet TV than traditional.
Younger audiences are the primary consumers and drivers of the online video streaming trend. In fact, studies have shown that Millennials watch 2.5 times more Internet video than traditional television.
According to the latest Total Audience Report from Nielsen, Americans aged 18 to 24 watched an average of 14 hours and 21 minutes of traditional TV per week in Q3 2016. That number has declined by 1 hour and 9 minutes from the previous year.
Another study from Deloitte found that 19 to 25 years olds spend 39% of their video viewing time streaming online while 29% is spent watching TV programming. For 26 to 32 year olds, it is 31% and 28%, respectively. This means they are streaming online more than they are watching TV.
It’s affecting traditional TV.
You may have noticed that Internet streaming has become more popular in recent years, and it’s affecting traditional television networks and cable and satellite providers. Today, the number of people using streaming services is the highest it has been in history. Nearly half (46%) of American consumers subscribe to online streaming services.
More than 78% of consumers in the U.S. subscribe to at least one over-the-top or (OTT) service--a streaming provider that delivers video content online without the need for traditional TV subscriptions.
Overall, TV will still have a strong foothold. According to eMarketer’s latest forecast of digital video consumption, by 2018, 202.1 million US adults will watch traditional TV, compared to 138.8 million streaming online. Another report predicted that the time US viewers spend watching pay TV will steadily decline, and by 2018, it will drop below 4 hours a day for the first time.
Some people have completely opted out of cable service for an Internet streaming service only. According to a recent Nielsen report, over 3.87 million American households are “broadband only”. Right now, online streaming seems to be a complement to pay TV for many households, but that could change. A recent Times article noted that more than 812,000 U.S. consumers--a record number--canceled their pay TV subscriptions in the second half of 2016
Streaming services are becoming content creators.
Streaming services like Netflix and Amazon are cutting out the middleman--TV networks--and creating their own content. You may have watched the huge Netflix original hit known as Stranger Things? Perhaps you are familiar with Orange is the New Black?
Based on research from IBM Cloud Video, the primary reason that people use a subscription video-on-demand (SVOD) service, is for more content (38%). The second reason they cited was access to a service’s exclusive content.
Netflix reportedly invested $5 billiion on original programming last year, and it paid off. TV networks also invested similar sums to original content to combat against declines in viewership. Original content seems to be where Internet TV is headed.
The demand for streaming content online isn’t exclusive to video. Radio has been transformed by the Internet streaming trend. People are creating their own podcasts. Through mobile apps and devices, they are listening to radio in their home, in their car and during their daily commute. Radio and audio streaming services like Pandora, Spotify, Apple Music and Sirius XM are attracting online radio listeners.
Internet radio reaches a wide audience.
In a recent Nielsen report, more than any other platform, Internet radio had the broadest reach across multiple demographics. Radio’s reach is 92% among 18-34-year-olds, 95% for ages 35 to 49 and 92% for people over the age of 50.
More time is spent listening to audio.
According to Edison Research, Americans spend an average of 3 hours and 58 minutes per day consuming audio. In 2016, people spent an average of 165 minutes per day listening to radio.
A significant portion of radio listening happens in the car. In fact, a Pew Research Center report claims that 37% of US adults with smartphones have listened to Internet radio in the car. That is six times the percent it was in 2010.
Traditional AM/FM radio still accounts for most of audio listening. Overall, it accounts for 54% of Americans’ listening time. Only 8% of people name online radio as the primary source of audio in the car, compared to 63% who use AM/FM most often and 12% that use satellite radio.
Still, online radio is becoming more popular. Since 2010, the number of monthly online radio listeners overall has more than doubled.
Statistics show that over 58.36 million Americans used Internet radio services in 2015. Each week, people spent an average of 12 hours and 53 listening to online radio. The percent of Americans over the age of 12 who have listened to Internet radio in the past month has grown to 57%, up 4% since 2015.
By 2018, forecasts predict that over half (55.8%) of the U.S. population and 68.4% of Internet users will be regular online radio consumers.
Listeners would rather endure ads than pay.
It’s no surprise that people don’t care for ads. But, when it comes to Millennials (ages 18 to 24) and Internet radio, 89% of listeners would rather consume ad-supported content than pay for a subscription.
However, if they must use ad-supported radio like Pandora and Spotify, Millennials want ads that are relevant to them. In a study by CRN, 75% of Millennials said they are most interested in listening to ads that offer useful and entertaining information that interests them.
This offers a unique advantage to businesses, content creators and advertisers. People are consuming vast amounts of content online, and thanks to advances in technological capabilities, it is easier to produce your own. Whether it is on YouTube or a podcast channel, it is possible to reach a large and highly engaged audience. On the other hand, with advanced targeting and tracking options, you may want to consider Internet TV and radio channels as possible advertising platforms. Either way, as our culture becomes a more mobile and Internet-first one, both are growing and changing the way we consume content. As a business, it is important to keep it on your radar. Want to know more about online TV, radio or other types of content and how they could impact your business? Chat with 10twelve today about the possibilities.