It was only a matter of time before the huge investments in streaming media made by Amazon.com Inc. (NASDAQ: AMZN), Netflix Inc. (NASDAQ: NFLX) and Apple Inc. (NASDAQ: AAPL) would significantly affect the video consumption landscape. That day has come, as 55% of American households subscribe to premium video streaming services.
Traditional media companies and cable networks should shudder, if their management has not already started to do so.
An extensive new study from Deloitte reveals two key numbers that show the rapidity of streaming media growth:
Since Deloitte started tracking subscription video on demand (SVOD) in 2009, adoption of streaming video services has risen each year. However, streaming truly “crossed the chasm” in 2017: 55 percent of US households now subscribe to paid streaming video services (the first time US streaming has passed the 50 percent threshold). In under a decade, the percentage of US households subscribing to a paid streaming video service grew 450 percent—from just 10 percent in 2009 to 55 percent in 2017.
US consumers can now choose from among 200 SVOD options, and they are taking full advantage: Our survey indicates that they subscribe to an average of three on-demand streaming services. That translates to collective monthly spending of $2.1 billion by US households on these services—and this figure keeps growing.
Additionally, U.S. households spend 38 hours per week watching video. Of these hours, 15 are spent watching streaming content. Two decades ago, virtually 100% of the hours watching video would have been traditional broadcast or cable-TV-based networks.
The study shows just how desperate the fate of traditional media has become. This desperation runs from broadcast companies like CBS Corp. (NYSE: CBS) to companies with large network TV operations like Walt Disney Co. (NYSE: DIS), which already has reported erosion of its flagship ESPN franchise. Traditional movie and television content studios have come up against the hundreds of billions of dollars invested in original programs by Amazon and Netflix. Some of these programs have begun to vie for awards. Both Amazon and Netflix have earned Golden Globe awards and Emmys.
The reports of the demise of traditional media have grown consistently. The new Deloitte report shows how bad the situation really is for the companies that own and produce programming for consumers.