Online TV outstripping live TV as a default entertainment source

DetailsMichelle Clancy | 26 July 2015

Online TV is slowly but surely taking over live television: More than three-quarters of US TV consumers watch online to some extent, says a report from to Hub Research.

Furthermore, it adds, the average pay-TV customer uses two or more online TV sources in addition to their MVPD subscription.

Live TV is still the single most common default video source — for now. About a third (34%) said that live TV is the first thing they turn on when they want to watch — higher than any other platform. However: that share is dropping significantly. In 2013, 50% of viewers named live TV as their default — 16 points higher than this year. Online sources now account for as much of a share of viewing as live TV and DVR combined.

Across users of all TV platforms, viewers allocate 32% of their total TV viewing to live TV (down from 41% in 2013) and 15% to shows on their DVR (down from 21% in 2013). Online platforms now account for 46% of all viewing time (up from 34% in 2013).

“A change in default sources is not the same as completely cutting a pay TV provider,” said Jon Giegengack, principal at Hub and one of the authors of the study. “However, we think it’s an important psychological threshold. People love choice — but when it comes to TV, there are more alternative sources than any one person could use. They crave a home base, and the position of ‘first source turned on’ will be an increasingly enviable one as the market evolves.”

The study also found that the conventional wisdom about Millennials is true: Among young viewers, online sources have replaced live shows as the home base for TV. In fact, 40% of viewers age 16-24 use Netflix as their home base. Only 26% default to live TV. Millennials specifically (age 18-34) are equally likely to default to live TV (33%) and Netflix (31%).

“It’s important to note that along with an overall decline as consumers’ go-to viewing source, Live TV is losing ground in what one might argue are the more valuable viewing occasions,” added Peter Fondulas of Hub. “The shows where people are most engaged, vs. the occasions when they’re just looking for something to have on in the background.”