LOS ANGELES—People still found a way to enjoy a TV show or big sporting event with others during the pandemic, as a new study by The Diffusion Group reveals that 25 million U.S. adults cowatched content with people outside their home via internet-connected screens.

The data, part of TDG’s “The Rise of Social Viewing & Watch Parties” study, found that one in seven adult SVOD users watched synced on-demand video as of March 2020.

“The pandemic not only drove home media consumption, but accelerated the use of connected TVs and video-based chat,” said Lauren Kozak, senior analyst and author of the report. “Not surprisingly, the two trends coalesced to create a new hybrid, the online watch party.”

Prior to the pandemic, cowatching services were limited and primarily used by those TDG describe as “technophiles.” But when lockdown orders were put in place, major tech-media firms began providing their own cowatching features. This included Instagram, Hulu, Disney+, Amazon Prime Video and Sling TV.

The report found that six in 10 SVOD viewers are aware of cowatching features, with three in 10 familiar with using them. TDG also noted that 54% of people that have not used cowatching features are open to doing so.

One particular area that SVOD users are interested in exploring cowatching capabilities is live sports, however only a handful of apps currently support this.

Additional findings from TDG’s report include that 18-24 year olds are the most likely to have engaged in cowatching, and that the majority of would-be cowatchers would prefer to do it through their home TVs rather than computers or mobile devices.

For more information, read TDG’s full “The Rise of Social Viewing & Watch Parties” report. 

LOS ANGELES—A new, major player is expected to join the ranks of streaming services like Netflix, Hulu and Amazon Prime when Disney launches its own direct-to-consumer subscription service, Disney+. According to a recent survey by The Diffusion Group, there is a solid level of interest in this new service.

The new Disney+ service is expected to offer Disney movie library titles—including classic Disney films, as well as Pixar, National Geographic, Marvel and “Star Wars” movies—Disney’s children’s TV shows and original shows and movies created for the service.

“This is a major studio pooling what is arguably the largest library of high-value content on the planet to populate a single branded subscription service,” said Michael Greeson, TDG president.

TDG surveyed adult broadband users on the likelihood they would sign up for “a Netflix-like service from Disney,” randomly assigning the respondents price points of either $5.99, $7.99 or $9.99 a month. The results found that about 43 percent of adults are various degrees of likely to sign up for the service, compared to just below 40 percent who say they in various degrees are unlikely to sign up.

“Based on our research, Disney+ will enjoy strong early demand,” Greeson concluded. “The amount of high-quality content being packed into the offering will make it not only appealing, but very sticky.”

However, the interest does seem to depend on certain scenarios. For instance, legacy pay-TV subscribers are more strongly interested in Disney+ than cord-cutters or cord-nevers; Hulu subscribers are more likely to sign for up the service than those with Netflix or Amazon Prime; age also plays a factor, as those younger than 35, or those with children under 18 and living at home, are more inclined to sign up.

TDG also views the launch of Disney+ as a testing ground for the DTC model. The service is expected to pull select content from third-party SVODs like Netflix to run exclusively on its own platform. The success or failure of this will serve as a model for if this kind of “tribalism,” as TDG puts it, can be sustained.

Disney+ is reportedly eyeing a fall 2019 launch.

PLANO, TEXAS—Is it possible to put a price on love? Research firm The Diffusion Group (TDG) was determined to find out –at least when it comes to consumers’ love affair with Netflix. What TDG found is enough to raise doubts among even the most hopelessly romantic.

Prompted by an anticipated price increase, which Netflix announced Jan. 15 –a bump of $1 dollar per month for the Basic tier to $9; $2 per month to $13 for the Standard tier; and $2 per month for the Premium tier to $16—TDG queried about 2,000 U.S. adult broadband users in December 2018 to gauge their reaction to subscription fee hikes.

The survey found that 16 percent of Netflix subscribers said a $1 monthly increase would make them likely to either downgrade to a lower service tier or cancel their subscription altogether.

“While TDG believes that Netflix will endure any short-term backlash from these increases, it is undoubtedly reaching a level of price resistance across all tiers,” said TDG President Michael Greeson.

For the survey, TDG split Netflix subscriber respondents into three exclusive groups. One was asked what they would do if the SVOD OTT service raised monthly fees by $1; another was asked about the impact of a $3 per month hike; and the third about a $5 monthly increase

Among those in the $1 monthly hike group, 8 percent said they would downgrade, and another 8 percent said they would cancel. Of those in the $3 monthly increase group, cancellation rates doubled, and downgrades tripled. Among respondents in the $5 monthly increase group, cancellations grew to 38 percent and downgrades climbed to 17 percent.

In Greeson’s view, other SVOD providers should take the findings to heart. “Netflix is the most highly valued SVOD service and enjoys the most loyal subscribers. As such, if it encounters resistance at these pricing levels, undoubtedly others will, as well.”

The findings are part of TDG’s latest Quantum Video Behavior study. More information is available on the TDG website.

PLANO, TEXAS—Seeing select premium networks alongside a few other channels going direct-to-consumer (DTC) with streaming services is more than a passing fad.

Citing the ongoing unbundling of cable TV packages in the coming years, The Diffusion Group predicts that all “major” TV networks will introduce OTT-powered, direct-to-consumer services by 2022.

That, of course, would build on several of the services that have already been launched, such as HBO Now, Starz, Showtime, CBS All Access, as well as those that are in the plans from The Walt Disney Co., including ESPN Plus, among others.

Mike Berkley, TDG’s senior advisor and author of the report—"The Future of Direct-to-Consumer Video Services - Analysis & Forecasts, 2018-2028"—said those mark the “early signs of an emerging media tribalism.”

[The Future of OTT Streaming]

TDG predicts that the move by major networks to go OTT and reserve their best content for direct-to-consumer offerings will help drive total DTC subscriptions close to 50 million by 2022.

"Big media companies are reacting more boldly to changes in TV viewing behavior," Berkley added. "Consolidating, bulking up on originals, and marketing directly to consumers are driving their strategic direction."

He also stressed that DTC strategies by networks are also risky and could damage their relationships with traditional distributors.

“If networks extract too much high-value content too quickly, channel conflicts are inevitable,” he said.

This story first appeared on TVT's sister publication Multichannel News.

PLANO, TEXAS—While there is an expectation that virtual operators like SlingTV and DirecTV Now will continue to eat into traditional pay-TV services share of the market, The Diffusion Group projects that there will be less to go around by the time 2030 arrives. This comes from a new TDG report, “The Rise of the Virtual Pay-TV Provider – Analysis & Forecast,” which focused on the evolving residential pay-TV space, with both long-term forecasts for virtual and legacy subscribers.

By 2030, TDG expects that the penetration of live multi-channel pay-TV services will decline from 85 percent of U.S. households in 2017 to 79 percent. Overall, 30 million U.S. households will live without an MVPD service of any kind, whether its virtual or legacy.

Legacy MVPDs and legacy pay-TV penetration are expected to see significant declines over the forecasted time period, with TDG predicting pay-TV penetration to fall from 81 percent of U.S. households in 2017 to 60 percent in 2030, a decline of 26 percent. Meanwhile, virtual pay-TV penetration might be looking at a growth of up to 350 percent, with TDG projections seeing it grow from 4 percent to 14 percent of households.

“TDG said early on that the future of TV was an app,” said Joel Espelien, TDG senior analyst. “The question is no longer if the future of TV is an app, but how quickly and economically incumbents can adapt to this truth and transition to an all-broadband app-based live multi-channel system.”

The full report can be viewed here.

PLANO, TEXAS—Early word on virtual pay-TV services is overwhelmingly positive, according to a new report from The Diffusion Group. TDG’s “Benchmarking the Connected Customer” project from Q2 2017 found that 86 percent of users find vMVPD services in a positive light.

The survey findings come from 2,000 adult broadband users. From that sampling, less than 5 percent said they were using a live streaming pay-TV service. However, among the users, 49 percent ranked service value as “very good” and 37 percent ranked it as “good.” There was 11 percent who were neutral on the service and 3 percent ranked the service as poor (1 percent “poor,” 2 percent “very poor”).

“Users seem okay without the ‘full Monty’ of legacy pay-TV channels, and to be fairly tolerant of the shortcomings that haunt live streaming video, such as buffering, pixilation and screen freezing,” said Michael Greeson, president and principal analyst at TDG.

TDG expects to launch additional research on vMVPD users, looking to assess who they are, their decisions and preferences and their potential impact on the future of TV.

To access the full “Benchmarking the Connected Customer” report, visit TDG’s website.

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PLANO, TEXAS—The threat of cord cutting has been a cloud over pay-TV providers for a while now, but according to a recent report by The Diffusion Group, the last two years have been a potential turning point. In the report “Life Without Legacy Pay-TV: A Profile of U.S. Cord Cutters and Cord Nevers,” TDG finds that 52 percent of cord-cutters cancelled their legacy pay-TV service either in 2015 or 2016, with a third of those coming in 2016 alone. TDG points out a number of factors and threats that contributed to this trend and why it might continue to grow.

One of the key elements is the popularization of on-demand streaming services like Netflix and Amazon Prime. This has led to legacy subscribers reassessing what they are paying for traditional TV services. “The calculus of today’s TV subscribers has been radically altered by the presence of SVOD services like Netflix,” said Michael Greeson, co-founder and principal at TDG.

Streaming has also become more than just a source for on-demand content, as it now offers a variety of live linear services that can be customized to the needs of the individuals viewing segments. “Whether from independents (Sony Vue, YouTube TV, Hulu) or from incumbents (DirecTV Now, Dish’s Sling TV), consumers now have greater flexibility in deciding for which channels they receive and pay,” reported Greeson.

TDG also points out that many incumbents are making the move to skinny bundle offerings—providing customers with lower prices and a customized, reduced number of total channels—but that it may in fact not be in their best long-term interest. “TDG observed long ago that incumbents were going to have to make a choice: either resign themselves to being a ‘dumb-pipe’ provider, or invest in using IP, change the TV experience, and become the go-to source for all things video,” Greeson explained.

One example Greeson gave of a company that had done well in this regard was Comcast. “Comcast turned into the latter, investing in the hardware and software required to bring the power of IP to the legacy TV experience. The company is now gaining video subscribers when others are reporting loses.”

The full “Life Without Legacy Pay-TV” report is now available.

PLANO, TEXAS—Practically three out of every four homes that use broadband in the U.S. now has an internet-connected TV, according to the most recent report from The Diffusion Group (TDG). Topping out at 74 percent at the end of 2016, that is nearly a 50 percent growth from the results in 2013, which saw internet-connected TVs in 50 percent of U.S. broadband homes.

The year-to-year growth has slowed in recent years after seeing 22 percent growth from 2013 to 2014 and 15 percent from 2014 to 2015. There was just a 4 percent growth from 2015 to 2016, though TDG points out that this was expected, as the growth of new connected TVs is attached to the growth of broadband, which is also slowing at this point in time.

“At 74 percent penetration, connected TV use is squarely in the Late Mainstream phase of its trajectory,” said Michael Greeson, TDG president and director of research. “Barring any major disruption in TV technology or market conditions, growth will slow each year as the solution reaches saturation.”

This information is based off TDG’s “Video Behavior in the Age of Quantum Media.”