Cutting Cords Trends (i.e. You Need an OTT Advertising Plan)

Consumers are tired of dealing with high cable and satellite costs, and many are “cutting the cord” in droves. 

Cord-cutting refers to consumers cancelling their traditional cable service and generally switching to over-the-top (OTT) streaming providers such as Hulu or Netflix. With OTT markets booming and traditional TV on its death throes, it's important for marketers to understand what trends are prevalent and how they can affect their ability to reach potential clients.  

At Cobalt Digital Marketing, we’ve been keeping a keen eye on TV versus streaming trends and would like to share a few of those insights with you.

What Does OTT, SVOD, AVOD, & TVOD Mean?

You might have run across these terms and acronyms at some point in recent years and wondered what they mean. Well, no need to wonder any more: 

• Cord-Cutting: As previously mentioned, cord-cutting refers to a consumer cancelling their traditional cable or satellite services. In some instances, however, a consumer might only partially cut the cord, meaning they retain basic-level services, or they may not transition to any other OTT provider at all. 
• SVOD: Subscription video on demand refers to video streaming services that users must subscribe to monthly in order to use; these types of OTT services include Netflix, Amazon Prime Video, Hulu, HBO, Disney, and the like. 
• TVOD: Transaction video on demand allows consumers to buy content on a pay-per-view basis. TVOD includes services like Apple iTunes and Amazon’s video store. 
• AVOD: Advertising-based video on demand is meant to be free to consumers, but just like with traditional television, consumers have to sit through advertisements. AVOD service providers include companies like YouTube, Crackle, and DailyMotion. 

Cord-Cutting Statistics & Trends for 2022

With cord-cutting rapidly expanding, there are some important trends business owners and their marketing agencies need to be aware of: 

1.  7 Million Cable Subscribers Cut Their Cords In 2020

Traditional cable and satellite TV providers are losing millions of viewers each year, including 30 million since 2012. A majority of these cord-cutters are moving to streaming services like those previously mentioned.

In fact in 2020, Comcast, Verizon, Charter, DirecTV, and Dish Network lost nearly 4,000,000 subscribers collectively, with DirecTV accounting for three million cord-cutters. 

2. The Average Monthly Cable Bill is Nearly $200 a Month 

A 2019 Consumer Reports study found that the average monthly TV bill in 2018 was more than $200, which included the cost of an average cable package, government fees and taxes, company-imposed fees, and additional premium service fees.

With the cost of cable rising, this might imply that companies are also having to spend more on their marketing to reach consumers. 

3. The Majority of Cord-Cutters Want Less Ads

Commercial ads have always played a critical role in traditional cable services, but consumers have had their fill and are willing to cut the cord in order to avoid them. Around 70 percent of consumers believe 20 minutes of ads for every one hour is too much, while 82 percent very much dislike seeing the same ads multiple times. 

However, this doesn’t mean consumers don’t want ANY ads; they simply want less. A COVID-era digital media survey found that 65 percent of consumers had a preference for either free services with minimal ads (12 minutes per hour) or were willing to pay a nominal fee for only 6 minutes of ads per hour.  

4. Subscription of Live TV Services Continue to Grow

While consumers may be leaving traditional cable and satellite service providers, that doesn’t mean they don’t want live TV. In fact, there are a number of internet-based service providers that are already replacing traditional services, including: YouTube TV, Hulu Live TV, Sling TV, FuboTV, and AT&T TV, among others. 

5. Additional Cord-Cutting Statistics 

• Nearly all Americans aged 25-34 access content through the internet with 90 percent of young people preferring this method of watching TV.
• Hulu + Live TV is the most common replacement.
• Households with cable or satellite TV will fall 26 percent (from the current 60 percent) by 2030.
• There are 55.1 million cord-cutters expected by 2022.
• 39 percent of sports watchers are using social media and other streaming services to watch live matches.

OTT Industry Trends to Keep an Eye On for 2022

With over-the-top services replacing traditional cable providers, it’s critical for digital marketers to understand these trends as well in order to stay ahead of their competitors, effectively deliver their message to consumers, get leads, convert said leads, and make profit.

A few OTT trends to keep in mind for the rest of 2022 include: 

• OTT streaming service subscribers are expected to become a larger group than cable TV subscribers.
• The average American household will be subscribed to 5-6 different services.
• Traditional TV viewers will continue to decline in number.
• The OTT market will be worth $6 billion.
• OTT subscribers are expected to reach an estimated 1.88 billion subscribers worldwide in 2022, double the amount of subscribers from just four years ago.
• Hulu’s market share is expected to grow from 10 to 15 percent.
• Smart mobile devices will become the primary device for watching video content.
• There will be more than 100 million US households with an OTT service.
• The fastest growing group of viewers are those aged 55 to 64.
• Brands are creating their own OTT channels to engage with consumers.

Cobalt Digital Marketing: McAllen’s Best OTT Digital Ad Service Provider 

Streaming video services are one of the biggest trends in the world of digital marketing. With nearly 150 million U.S. adults now using services like Hulu, CBS All Access, Sling, and a wide number of devices such as Apple TV, now’s the perfect time to grow your brand through data-driven targeting and OTT ads. Reach your audience directly in their living room.

Contact Cobalt Digital Marketing