Growth in the online video space appears set to increase, according to Wall Street research firm Barclays, due in part to a growing number of OTT viewers over the age of 50.
“The pace of growth of broadband only homes is accelerating with a proportionate impact on pay TV households. Also, some new trends are starting to emerge which could result in the pace of declines in television viewership accelerating further,” the firm wrote in a new report, pointing to the fact that, according to the U.S. Energy Information Administration, the number of households with one or two TVs has declined from 69% in 1997 to 58% in 2015. “While video can also be watched on smartphones, computers and tablets, a TV has just one purpose for the most part, premium video, while other screens make consumption of premium video an activity that is fungible with other forms of entertainment.”
But perhaps more importantly, the firm pointed out that a growing number of older Americans are also watching online video, an indication that the medium is expanding beyond its traditionally younger base of users.
“The core demographic which drives a large proportion of television viewership (A50-64) is now starting to see viewership shift to OTT platforms,” the firm wrote.
Specifically, citing data from Nielsen, Barclays analysts noted that online video consumption continues to grow across all demographics, including a 45% increase in adults age 50-64 and a 36% increase in adults aged 65 and over. The firm also said that traditional TV viewing declined for the first time among Americans aged 50-64 in the first quarter of this year.
In its survey of data on the space, Barclays also pointed to continued growth in connected devices, including smart TVs. Citing data from NPD, the firm said that by the end of this year there will be 200 million connected devices in the United States, with smart TVs driving half of that growth. The firm pointed to Nielsen figures showing that the percentage of users with enabled smart TVs grew from 23% in the first quarter of last year to fully 29% in the first quarter of this year.
Similarly, Barclays noted that the market for SVOD services grew from 50% in the first quarter of last year to 57% in the first quarter of this year.
Those figures are noteworthy to players in the online video market that have traditionally been targeting millennials on their smartphones, tablets and computers. The numbers indicate that online video providers and vendors may well need to more completely address older users and connected TVs, among other demographics and devices.