A new survey of US teen consumer trends revealed that Netflix (NFLX) and YouTube (GOOGL) remain the streaming favorites as the cord-cutting trend continues.
Piper Sandler’s bi-annual teen survey, which surveyed 14,500 teens in 47 states between August 12 and September 23, found that 43% of respondents do not have cable TV in their home, compared to 41% in spring 2022 and 17% as of fall 2016.
The survey suggested a greater transition to online video and streaming services, with 7% of teens surveyed saying they expected their household to drop cable TV in the next 6 months.
As for the top streaming destinations for teens, respondents said they spend 32% of daily video consumption on Netflix and 29% on YouTube. The results at the top were roughly in line with the results from fall 2021, although YouTube saw a slight drop in consumption year over year.
Both Netflix and YouTube lead the way by a significant margin compared to other platforms, although streaming services such as Disney+ (DIS), Amazon Prime Video (AMZN) and HBO Max (WBD) gained share amid further declines in television. by cable.
With advertising to increase consumer choice
Cheaper ad-supported tiers could further accelerate cord-cutting trends as consumers look to cut spending amid worsening economic conditions.
“Cord outage has definitely intensified in the second quarter,” Well Fargo analyst Steve Cahall wrote in August, “and we expect it to remain elevated given content shifting to streaming + consumers looking to cut their subscriptions due to to the macro [conditions] and/or subscription fatigue”.
Netflix and Disney are the latest platforms to jump on the ad bandwagon, with the latter aiming to officially launch its ad option on December 8.
Netflix recently announced two senior hires in its own efforts to roll out an ad-supported level next year, though recent messaging has indicated the company may push the launch to November 1 to get ahead of Disney’s timeline.
The ad-supported version will cost between $7 and $9 per month, according to Bloomberg, and the company plans to play four minutes of ads for every hour of content.
Earlier this week, JPMorgan analyst Doug Anmuth estimated that Netflix could attract 7.5 million subscribers at its ad level in the US and Canada by 2023, generating $600 million in sales from Netflix. advertising.
By 2026, Anmuth anticipated that Netflix’s US and Canada segment will have 22 million subscribers and generate $2.65 billion in ad sales.
While Netflix has enjoyed quite a few Wall Street upgrades in recent weeks as a direct result of the upcoming launch, shares of the streaming giant are still down 63% so far in 2022.
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