PORT WASHINGTON, N.Y.—A new survey from The NPD Group has found that consumers are more worried about the cost of streaming services than they were last fall, with cost going from being the #4 reason for canceling a subscription video on demand (SVOD) service in October of 2021 to #2 in April of 2022. 

The latest TV Switching Study from NPD also found that consumers are also increasingly signing up for services based on promotional or discounted offers.

“In the last several months consumers have had to navigate rising prices in many facets of their lives and SVOD services are part of that mix with companies like Netflix and Amazon raising their subscription rates,” said John Buffone, executive director, industry analyst at NPD. “While cost considerations in SVOD services are still dramatically lower than in cable and satellite TV, it is important for providers to recognize that price sensitivity is growing so they can adjust their offerings to retain their subscriber base.”  

As of April 2022, promotional offers and discounted fees were more heavily influencing not only if consumers signed up for a SVOD service, but also their preferred method of sign-up (e.g., direct from the provider). In the survey period, the #1 reason cited for SVOD users signing up for a service was because of a free trial offering. At the same time, promotion/discount offers became the top reason driving the preferred sign-up method, moving up four spots from October 2021 (among viewers extremely or very likely to subscribe to a SVOD service in the next six months). 

But while price and promotions/discounts play increasingly important roles, content remains critical to consumers, the researchers said. 

Knowing that a specific TV show or movie was on a service drove one-third of SVOD users to sign-up, an increase versus six months ago, driven by younger viewers (up six percentage points).

“Consumers are creating a value equation to determine what services they ‘need’ versus those they cancel, especially as they return to experiential activities,” added Buffone. “For some consumers ad supported tiers can be a way to cut costs without losing access to content. As we look to the future – including potential AVOD offerings from Netflix and Disney – understanding the differing consumer value propositions will be key in determining tier structure and pricing strategies.”

At a time when many companies are rushing into ad-supported services, the survey highlighted the fact that consumers are more engaged and more likely to use an ad free service. 

When pricing tiers are available, survey results indicate that a customer who pays a premium for an ad-free experience is engaging with the service more frequently with 28% reporting using the service every day or most days vs. 20% of the ad-supported subscribers reporting the same. Consumers that pay a premium for ad-free viewing also place significantly more value in content availability, exclusivity, search, discovery, and user interface, indicating they are a more engaged consumer, the researchers said. 

The results of the NPD Group’s Connected Intelligence TV Service Switching Study are based on online consumer surveys of more than 5,000 U.S. consumers, aged 18+ from diverse regions and demographical backgrounds. The report was fielded from April 5- 21, 2022.

PORT WASHINGTON, N.Y.—In a new survey that highlights an opportunity for cable and broadband operators sell both home security and video subscription services, the latest Home Automation Ownership & Usage Report from NPD’s Connected Intelligence is reporting that 41% of consumers who purchased security cameras, security systems, or smart doorbells at retail also chose to pay for a subscription service to access premium features. 

With unit sales of these products expected to grow nearly 20% through 2023, according to NPD’s Future of Tech report, this creates an opportunity for companies selling security services, including smart home manufacturers and cable operators who offer smart home features over their broadband networks.

NPD’s latest data reveals that consumers who purchase these subscription service plans after buying their devices at retail are often individuals under the age of 35, who have a household income over $100K, are more likely to have young children, and are also more likely than non-subscribers to live in multi-unit buildings or townhomes. Additionally, subscribers are more invested in smart home technology, with 41% owning five or more different types of smart home devices, while only 25% of non-subscribers do.

“Smart home subscription services have long been seen as a path to profitability for smart home manufacturers, but creating offerings that are appealing to consumers – from both a features and financial standpoint – will be key to creating a loyal base,” said Jill Aldort, director, industry analyst for The NPD Group.

Of the consumers who subscribe to these services, 29% reported that 24/7 continuous video recording (CVR) is the most compelling reason to pay these additional fees. This is nearly double the 16% of respondents that cite access to an extended history of video clips as the top reason.

The NPD Group Connected Intelligence Home Automation Ownership & Usage Survey is based on consumer panel research that reaches over 5,000 U.S. consumers, aged 18+ from diverse regions and demographical backgrounds. The survey was fielded between March 17 – March 31, 2021.

PORT WASHINGTON, N.Y.—It is often said bigger is better, and Americans are affirming that belief when it comes to their TVs, as a recent NPD Group research report finds that more U.S. consumers are opting for bigger TVs. The report also finds that consumers are taking less time between buying a new TV.

According to NPD’s “TV Ownership Trend Reports,” the number of installed TVs in the U.S. that are 60 inches or larger has increased to 15% from 11% from NPD’s previous report. Also, when consumers are buying a new TV, the average size of the replacement has gone up from 49 inches in November 2019 to 51 inches.

As far as how frequently people are updating their TVs, NPD found that the average age of installed TVs is 4.9 years, compared to 5.4 years in 2019.

Through November 2020, per NPD, TV sales were up 19% compared to the same period in 2019; this includes the percentage of TV sales for bigger models. TVs coming in at 65 inches were up 27%, while 70-inch and above TVs were up 82%. Combined, 65-inch and above TVs accounted for 21% of sales, up from 18% in 2019. NPD expects that number to increase by 2022 to about 27%.

There are other factors that consumers factored in when purchasing a new TV. HDR reportedly impacted 13% of replacement TV sales, while the availability of apps were a factor in 31% of sales, up from 23% in 2019.

“This year consumers saw the value in bigger screens and newer, more modern technology to support their entertainment needs,” said Stephen Baker, vice president, industry advisor for The NPD Group. “This commitment to new technology and the value it can provide to the consumer will be key for the continued growth in larger screen TVs in 2021 and beyond.”

Like most things in 2020, the pandemic also had an impact. As John Buffone, executive director, industry analyst with NPD’s Connected Intelligence, detailed, with people advised to stay at home and spending on other forms of entertainment (live events, movies) almost non-existent, U.S. consumers shifted that spending to improve their at-home experiences.

For more information, visit www.npd.com.  

PORT WASHINGTON, N.Y.—As the number of streaming services continues to grow, consumers are embracing their options by increasing the average number of streamers they watch, according to a new study from NPD Group.

NPD’s TV Switching Study tracks the changes in the ways U.S. consumers view and buy digital content. In its most recent edition of the study, NPD found that the average consumer uses seven subscription (SVODs) and free streaming services, up from five as of April of this year.

PLUS: Ampere: U.S. Homes Must Add Streamers to Keep Breadth of Content

The COVID-19 pandemic has impacted the viewing habits of consumers, NPD acknowledges, but it believes that it’s more than people just being home more.

“By and large, consumers want the ability to customize their viewing experience, bundling both paid and free services that provide them with the content they want, when they want it,” said John Buffone, executive director, industry analyst with NPD’s Connected Intelligence practice.

Per the report, access to exclusive content was the main reason for consumers to use SVOD services (39%). This is leading consumers to switch, cancel or decrease their engagement with services if they feel there’s better content elsewhere—NPD reported 21% of consumers did so, up from 14% in April.

Free streaming services are becoming more popular as well, growing from 39% viewership among consumers in April to 47% as of the latest report. However, NPD says that free services, while having lower churn, experience lower engagement rates, which makes their content all the more important.

“Amidst COVID-related content production challenges, viewers are increasing the number of streaming services they use, as they seek to find content that captures their interest,” said Buffone. “Competition will become an even greater challenge for services. Both now, as viewers try more options and later as production ramps up and each service gets new programming.”

NPD’s TV Switching Study results were as of October. For more information, visit www.npd.com.  

PORT WASHINGTON, N.Y.—The next three years look to be a time of some major growth for internet-connected TVs, according to a new report from the NPD Group. The report forecasts that 238 million smart TVs and streaming media devices will be installed by the end of 2019, which would represent a 59 percent increase from 2015.

Read the full story on TV Technology’s sister publication, TWICE.