According to a recent study on American teen consumer patterns, YouTube (GOOGL) and Netflix (NFLX) continue to be the top streaming options as the cord-cutting movement gains traction.
Between August 12 and September 23, 14,500 teens from 47 states participated in Piper Sandler’s semi-annual teen survey, which indicated that 43% of those interviewed did not have cable TV at home, up from 17% in the autumn of 2016 and 41% in the spring of 2022.
According to the poll, 7% of youth expect their family to stop using cable TV in the next six months, further supporting the trend toward online video and streaming services.
Teens said that Netflix and YouTube accounted for 32% and 29%, respectively, of their daily video usage, respectively. The top results were largely in line with those from autumn 2021, despite a modest year-over-year decline in YouTube’s usage.
Although streaming services like Disney+ (DIS), Amazon Prime Video (AMZN), and HBO Max (WBD) have gained a share amid additional decreases in cable television, Netflix and YouTube continue to lead by a wide margin when compared to other platforms.
Ad-Supported to Increase Consumer Choice
Cheaper, ad-supported tiers would encourage more people to cut back on their spending if the economy continues to get worse.
Wells Fargo Analyst Steve Cahall stated in August that “cord-cutting clearly stepped up in Q2 and we anticipate it to continue elevated given all the content transitioning to streaming + customers wanting to reduce their subscriptions due to the macro [conditions] and/or subscription fatigue.”
In its own plans to create an ad-supported tier next year, Netflix recently announced the hiring of two senior executives. However, recent messaging suggested that the firm may be pushing the debut date forward to November 1 in order to beat Disney’s schedule.
According to Bloomberg, the ad-supported version will run four minutes of advertisements for every hour of programming and cost between $7 and $9 per month.
Earlier this week, JPMorgan Analyst Doug Anmuth predicted that Netflix could persuade 7.5 million Americans and Canadians to subscribe to its advertising-supported tier in 2023, generating $600 million in ad revenue.
Anmuth predicted that the U.S. and Canadian Netflix market will have 22 million users by 2026 and generate $2.65 billion in advertising revenue.
While the impending launch has directly led to a number of Wall Street upgrades for Netflix in recent weeks, the streaming giant’s stock is still down 63% so far in 2022.
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