Streaming Media and Cord Cutting Trends Creating New Dynamics in the TV Ecosystem

At the onset of the pandemic, TransUnion surveyed consumers to see how media consumption habits were evolving as people adapted to new restrictions and routines. In May, more than half of US adults surveyed reported using paid streaming services more than they did pre-pandemic.

As consumers settle into a “new normal,” we wanted to know: Have these behaviors and attitudes changed? Our prediction was these digital habits were set to become part of consumers’ lives moving forward — and this global pandemic simply accelerated a trend already in motion.

Screening for fatigue

What we found was these habits are in fact persisting and in many cases growing. Based on a follow-up survey TransUnion conducted in November 2020, nearly three quarters (71%) of US consumers now report increasing their use of paid streaming services since the onset of the pandemic. While “Zoom fatigue” may be very real, consumers continue to engage with screens through streaming services.

Nearly 7 in 10 (68%) respondents said they’ll consider adding more streaming services to their rotation in 2021 if the platform has content of interest or if the service is more cost-effective than cable or satellite television. This soundly reinforces the shift to cord-cutting — and we see how pronounced it is in a breakdown by generation.

The changing of the TV guard

The impact of these cumulative trends can be seen in the buoyancy of results posted by media companies that have centered on the streaming business, and in forecasts for “TV” ad spend. Adjusted eMarketer forecasts put US TV ad spending for 2020 at $60 billion, a 15% decline from the over $70 billion in 2019. Meanwhile, US CTV ad spend is set to increase 27% this year to just over $8 billion.

In a June 2020 poll, the IAB found that 59% of marketers planned to increase their CTV and OTT ad spending in the second half of 2020 compared with the same time period a year prior. One marked shift seemed to be in lead time for the planning of those campaigns. Marketers and media buyers have tried to remain more agile since the onset of the pandemic given the shifts in the market, forcing many to condense planning timelines and turnaround executions more swiftly.

In a year of uncertainties, CTV and streaming has definitely become an advertising bright spot.

Identifying the trends

Connected TVs are becoming the primary device for streaming content consumption, per preferences noted in our survey. Although, these smart TVs are just one of the many devices in the new interconnected home. Our survey found 47% of consumers report having three to six connected devices in their home or on their home network, and nearly a third report the presence of seven or more devices.

With more devices and signals being emitted, the home is truly becoming a new epicenter for identity. For the advertising industry, there’s value in understanding theses connections — the new points of engagement and personalization, and the devices and the people behind them.

CTV and OTT advertising is not without fault — frequency capping, measurement, inventory access points and identity resolution challenges are all still being solved for as the new normal of consumer consumption translates to the new normal of advertising execution.

The bottom line

The acceleration of streaming media consumption within the connected home, while originally spurred by the COVID-19 pandemic, is almost certainly here to stay. This new media reality is forcing the industry to rethink the role of the household and the traditional definition of TV.

This year was fraught with ambiguity and fluctuation. In 2021, more change is likely, but by knowing the trajectory of trends — and leading with a consumer-centric view — the advertising and marketing community can continue to innovate and find success across the connected home and beyond.

For more media consumption trends, please view our latest infographic.