According to Parks Associates, over-the-top (OTT) video services have transitioned into the home's living room, with 52% of U.S. broadband households now watching online video on a TV that is connected to the Internet. The research house says watching TV or movies at home is the most popular leisure activity among U.S. broadband households, with 55% selecting this among their top two favorite leisure activities.
"While the total number of hours consuming videos has declined, consumers are watching more internet video on the largest screen available," said Billy Nayden, Parks research analyst. "The number of hours consumers report watching video on a TV increased for the first time since 2014, with connected devices enabling Internet video services on TV and shifting consumers away from PC and mobile viewing. As OTT competition becomes a battle for the living room, the challenge for device makers and content producers is finding the correct product mix to maximize both profit and utility."
Parks says subscriptions are the dominant business model for OTT services. As more services emerge, many stakeholders fear an impending subscription overload in U.S. households.
"As consumers' taste for OTT experimentation wanes, they will start to resist the push to add another monthly subscription to their households," Nayden said. "Many providers are starting to lead with freemium and ad-based models, in anticipation of this pushback."
Other findings indicate:
- 19% of consumers subscribe to either Netflix, Hulu or Amazon Prime Video and another OTT service, compared to 13% in 2017.
- Consumers watched 25.7 hours of video per week in 2018, down from 29.5 hours per week in 2016.
- Local broadcast/channels and programs are the most watched type of programming.