Navigating the Evolving Entertainment Landscape: Consumers Seek Balance Amid Economic Shifts

The latest TiVo Video Trends Report sheds light on the shifting dynamics in the US entertainment industry, as consumers adapt their spending and viewing habits to the changing economic landscape. The report reveals a nuanced picture, where entertainment consumption remains steady, but consumers are seeking more cost-effective solutions, leading to a rebalancing of the industry's offerings.

Empowering Consumers: The Rise of Bundled and Ad-Supported Services

The report highlights a significant shift in consumer behavior, as they navigate the economic headwinds. While daily viewership hours have remained relatively stable, the average total entertainment spend has decreased by $30 year-over-year. This indicates that consumers are seeking more value-driven options, leading to a decline in the average number of services used, from 10.9 in 2023 to 9.1 in 2024.

Embracing the Ad-Supported Model

In response to this trend, major media companies have recognized the power of providing customers with a complementary package of SVoD, AVoD, and FAST services. The report reveals that among SVoD users in 2024, approximately 64% utilize the available ad-supported tiers, a significant increase of 16 percentage points from Q2 2023. This suggests that consumers are becoming more receptive to ad-supported content, as they seek to balance their entertainment needs with their budgets.

The Bundling Advantage

The report also highlights the growing appeal of bundled services, with nearly 62% of respondents stating that they are "likely" or "much more likely" to keep their broadband service if their provider bundled additional streaming services. This indicates that consumers are actively seeking ways to consolidate their entertainment options and save money, driving the industry to adapt its offerings accordingly.

Improving the Ad Experience

Interestingly, the report suggests that consumers are also becoming more tolerant of advertisements, as the quality of ads on FAST and AVoD services continues to improve. This shift in consumer sentiment is crucial, as it allows entertainment companies to explore new revenue streams and provide more affordable options to their customers.

Navigating the Discovery Dilemma

The report also sheds light on the ongoing challenge of content discovery, with nearly 85% of respondents sharing that they often browse before settling on a show or movie to watch. Additionally, almost 73% of respondents indicated that they typically explore more than one app during a viewing session to find their desired entertainment. This highlights the need for entertainment providers to enhance their recommendation algorithms and user experience to help consumers navigate the ever-expanding content landscape.

The Enduring Power of Word-of-Mouth and Traditional Advertising

Despite the growing importance of digital discovery, the report suggests that traditional methods of content discovery remain influential. The top methods of discovery continue to be word-of-mouth/recommendations from friends (50%) and commercials or ads that run during other shows (40%). This underscores the enduring value of personal recommendations and the continued relevance of traditional advertising in the entertainment industry.

Shifting Trends in Social Video Consumption

The report also notes a slight decline in the percentage of respondents who watch video via their social media and/or user-generated content networks, from 85% in the spring of 2023 to 79% in the current survey. This shift suggests that consumers may be diversifying their video consumption habits, potentially exploring other platforms or traditional entertainment options.

The Dominance of Prime Video in TVoD

The report also highlights the changing landscape of transactional video-on-demand (TVoD) services. While the share of pay-TV subscribers utilizing TVoD has declined substantially, from 54.3% in Q2 2023 to 45.7% in the current survey, Prime Video continues to lead as the top TVoD service, followed by YouTube.In conclusion, the TiVo Video Trends Report paints a nuanced picture of the evolving entertainment industry, where consumers are seeking a balance between their entertainment needs and their budgets. The rise of ad-supported and bundled services, coupled with the improving quality of advertisements, suggests that the industry is adapting to meet the changing demands of its audience. As the landscape continues to shift, entertainment providers will need to stay agile and responsive to the evolving preferences and behaviors of their customers.