In a fragmented video landscape, viewers start online

Today's vast television ecosystem combines streaming services, traditional pay-TV, and free ad-supported platforms, reflecting a sea change in how viewers find and consume video content. The scales are tipping in favor of online sources their first stop when seeking out video content. Over two-thirds (67%) of respondents report they turn to an online source first when they want to watch TV. Only 26% default to a traditional MVPD (Multichannel Video Programming Distributor) set-top box. Hub Entertainment Research's new report, Decoding the Default, highlights an increasingly fragmented ecosystem where viewers lean more toward online platforms than ever.

From traditional TV to streaming

As cord-cutting and "cord-never" populations continue to grow, the number of viewers who rely solely on traditional pay-TV services is dwindling. According to Hub's findings, more than twice as many viewers use both traditional pay-TV and streaming platforms rather than just one type. Audiences find that streaming platforms offer more options and flexibility than traditional TV. Deloitte's Digital Media Trends report echoes this, noting that many consumers find streaming services more aligned with their viewing needs. They prioritize content that matches their schedules rather than set broadcast times.

Viewers' SVOD stack

Viewers' video-on-demand (SVOD) "stacks" are getting larger, with many people subscribing to at least three different services. The report shows that the percentage of consumers using three or more SVODs more than doubled since 2020, illustrating the growth of multi-platform use. This expansion is partially due to the massive libraries each SVOD offers; for instance, Netflix, Hulu, and Disney+ have extensive catalogs covering different genres and audience segments.

Yet, while viewers may stack multiple services, only a few platforms become their "default." Netflix leads this default category, with 26% of respondents choosing it first. This trend toward Netflix as the initial go-to aligns with its status as a pioneering platform with an established reputation for both quantity and quality of content. Hulu and Amazon Prime Video follow while Disney+ and Max (formerly HBO Max) fall slightly behind.

Online streaming is the new "home base"

Hub's findings underscore that, for most viewers, the default experience of "turning on the TV" starts with online streaming. About one-third of viewers say they now go directly to a built-in smart TV app, showing a 50% increase in usage since 2021.

The appeal of smart TV apps lies in their convenience. They provide immediate access to various streaming platforms without additional hardware. The transition to smart TV apps represents a natural evolution of how viewers experience TV.

Research from the Leichtman Research aligns with this trend, finding that 87% of U.S. households own a device connecting their TV to the internet, from smart TVs to streaming media players. This widespread connectivity facilitates using apps like Netflix, Hulu, and Prime Video, solidifying them as the primary sources of TV content.

SVOD loyalty driven by "favorite shows"

Hub's report highlights a crucial driver of platform loyalty-exclusive content. When viewers have a specific favorite show exclusive to a particular SVOD, they're more likely to remain loyal to that platform. This "stickiness" effect is essential in a crowded market where content variety can make or break viewer retention.

On the other hand, traditional MVPDs still hold an edge on live TV, particularly for sports and news. These content categories remain strongholds for pay-TV providers, appealing to a demographic that values real-time events. However, this loyalty is eroding. The report notes that nearly a quarter of MVPD users would consider canceling their service if forced to choose between platforms.

The growth of FAST

FAST services are also becoming a mainstay for many viewers, especially those who prioritize content variety over exclusivity. FAST platforms appeal to cost-conscious consumers who prefer a broad selection of programming without additional monthly costs. Their rise complements subscription streaming by offering a fallback for when paid services are unavailable or too costly.

FAST providers such as Pluto TV and Tubi are gaining traction as they offer a unique blend of on-demand and live content with a more traditional TV-like feel. According to a survey from eMarketer, over half of U.S. adults now use FAST services. For these viewers, the trade-off of ads in exchange for free content is more appealing than paying for an additional SVOD, further underscoring the complexity of the modern TV ecosystem.

Will MVPDs adapt?

The rapid decline of MVPD set-top boxes poses an existential challenge to pay-TV providers, who now face pressure to innovate or risk further market loss. Some MVPDs are pivoting to streaming bundles or hybrid solutions to capture traditional and digital audiences. However, Hub's report suggests these changes may be too late. As smart TV apps and streaming services become the "default" choice for viewing, MVPDs could be relegated to a niche role unless they compete with streaming platforms on convenience, affordability, and exclusive content.

As more people rely on streaming services and smart TVs, the influence of traditional MVPDs is waning. Netflix's leading SVOD "default" position reflects its early mover advantage and vast content library. Meanwhile, traditional TV's staples-live news and sports-feel less essential as viewers increasingly favor on-demand content.

audience acquisition, content discovery, digital video, FAST, SVOD