Across the entire TV viewer base, live TV from a traditional pay TV service remains the most common first stop for viewing, Hub confirmed in its annual “Decoding the Default” study, which tracks the TV source that consumers turn on first when they are ready to watch. According to the researcher, 28% say that linear channels from a cable, satellite, or telco TV subscription is their TV home base. Netflix is a close second, at 23%, while no other individual source reaches double digits.
However, live TV has been dropping steadily as a default source over the past seven years, and is at its lowest point since Hub began measuring default sources. Netflix reached a saturation point as a default in 2018 (23%), and has been fluctuating around that level ever since. On the other hand, the other “Big 5” streaming subscription services (Prime Video, Hulu, Disney+ and HBO Max) have made more consistent gains. While no single service in this group comes close to Netflix, in combination they are now just seven points behind.
The declines in linear from traditional pay are not helped when one adds in linear from Virtual MVPDs. If anything, adding in live from VMVPD shows an even more pronounced decline for live TV in general as the first stop for television. The percent turning first to VMVPD has not risen above 6% since Hub started measuring defaults. Overall, the percent defaulting to any live TV subscription is only 32% in 2022, three points lower than in 2021 and seven points lower than in 2019.
The “Decoding the Default” study also revealed that choice of default is dramatically different by age. Among 18-34 year olds, 38% make Netflix their first viewing choice - more than three times the proportion who default to a traditional live source. On the other hand, half (50%) of 55+ year-olds turn first to pay TV linear channels, more than five times the percent who make Netflix their first viewing stop.
Although live from traditional TV still hangs on to a slim lead as the top individual default source, online sources in general dominate traditional pay TV sources in general. And that dominance has increased since even last year: 57% make an online source their TV home (up from 55%) last year, while 38% default to a source from a pay TV set-top box: live, DVR, or VOD (down from 39%).
According to Hub, being a default service is so important because those who default to a service are dramatically more likely to remain loyal to it. The researcher asked consumers to say which of the TV services they currently have they would keep if they had to drop all services except one. Among all subscribers to traditional pay TV service or each of the Big 5 SVOD players, anywhere from 8% to 37% name each as the service they would hang on to if they had to drop all others. But among those who default to each of those services, the percent saying it would be the one service they would keep jumps dramatically, to anywhere from 59% to 65%.
“At a time when the typical TV consumer uses an average of 7.4 different sources of TV content, simple penetration of a service in the marketplace is no longer a reliable measure of long term service success. A much better predictor is how much consumers engage with each service they have—and in particular, which they consider their TV viewing home base,” commented Peter Fondulas, Principal at Hub and co-author of the report.