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As Streaming Surges Past Cable, Researcher Predicts New Changes in What You Watch

More Sports, Higher Prices (or More Ads) Will Shake Up Internet-based Viewing

By Pablo Suarez

Person scrolls through streaming options on tablet

Most of our tube time this year will be streaming video, not traditionally programmed TV, industry watchers say. From more commercials versus cable to a new emphasis on live sports, a UMD researcher breaks down what could change as a result.

Photo by Shutterstock

Cord-cutting bargain hunters and those who refuse to be tied to a set programming schedule may be getting the upper hand. For the first time, streaming is predicted to overtake traditional TV as the preferred form of entertainment for U.S. adults in 2023.

According to Insider Intelligence, nearly 53% of video consumption time this year will be spent on streaming services and social media platforms compared to traditional cable TV. The biggest factor playing into the new change lies in streaming’s personalization capabilities, said Bo “Bobby” Zhou, associate professor at the University of Maryland’s Robert H. Smith School of Business.

“Each viewer can enjoy tailored content even if they are streaming on different devices in the same room,” he said.

To Zhou, the companies best positioned for success through this shift are Netflix, TikTok and YouTube. All three are already capturing the attention of U.S. adults, and their gains will likely continue due to teenagers’ preference for social media and streaming.

Netflix still holds an advantage in the long-video domain because it strategically invested in first-party content long before its competitors caught on. It also benefitted from a robust and effective recommendation system that improved the user viewing experience by making it easier for subscribers to find interesting shows. “House of Cards” and “Squid Game” are quintessential examples of shows that started with massive data analysis of Netflix’s audience, followed by the crafting of content to fit viewers’ preferences and search habits.

“To some extent, Netflix has created a positive cycle, where a huge amount of data on viewer preferences improves its ability to create hit shows, and these shows further provide information on the changing landscape of viewers’ tastes,” said Zhou.

In the short-video domain, TikTok reigns supreme. Unlike Netflix or YouTube, TikTok capitalized on two major characteristics of young consumers: decreased attention span and ease with creating content. Zhou said that combined, they “have helped TikTok achieve incredible growth and financial success.”

YouTube owner Google’s financial resources and brain power have helped it stay at the head of the pack in streaming video for almost two decades. Unlike Netflix and TikTok, its unique strengths are its attractiveness to advertisers and the ability to collaborate with other content providers like CBS and ESPN. That bodes well as it continues efforts to expand beyond mobile devices through YouTube TV, adding premium content with YouTube Primetime and hosting “NFL Sunday Ticket” this coming fall, Zhou said.

That acquisition, along with Amazon’s “Thursday Night Football” streams, Apple TV’s “Friday Night Baseball” broadcast and other live sports streaming services are significantly impacting one of traditional TV’s major remaining drivers of viewership.

Nielsen data shows that 92 of the 100 most-watched programs on TV in 2022 were live sports, with the NFL accounting for 82 of the spots. Investing more in acquiring the rights to live sports will prove critical in sustaining the growing popularity of streaming platforms, especially given that, according to Zhou, they provide “extremely valuable social moments.”

“If streaming platforms can nicely integrate live sports, they can even expand these ‘together moments’ by allowing viewers from different locations to enjoy the same live content together,” potentially interacting through a chat function similar to what Twitch enabled for its Thursday Night Football streams, he said. “That will create a whole new experience and it will be practically impossible for cable TV to come back to where it was years ago.”

The road ahead for streaming is paved with questions for marketers and consumers alike, Zhou said. The former will need to effectively extrapolate viewers’ preferences from their comments and a show’s content to provide more relevant products and services; this must be balanced with respecting consumer data privacy and providing transparency, he added.

Viewers, on the other hand, will make decisions in light of recent price hikes across streaming platforms. Zhou said more ads will be displayed and consumers will become accustomed to seeing them to keep subscription prices down, and viewers will more selectively choose streaming services that match their particular interests, such as HBO with its premier TV shows and movies or Disney+ with its children’s programming.



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