COVID-19 streaming surge puts U.S. on ‘verge of habit change’

The coronavirus pandemic has led to a video streaming surge and cord cutting acceleration that could affect long-lasting change in consumer viewership behavior.

Rob Holmes, vice president of programming at Roku, said consumers were already looking for more value in video products before the virus and that current economic uncertainties and other factors have now heightened that demand.

“We’re on the verge of habit change here,” he said during the Variety Executive Leadership Summit at NAB Show Express. “We’ve seen ad-supported streaming grow faster than subscription or MVPD or virtual MVPD categories. We see this as a fundamental acceleration of a trend that we already had at hand, but we don’t any signs of its slowing down.”

RELATED: Roku nears 40M active users as platform revenue spikes in Q1

Last week, Roku reported its first-quarter earnings and said it added another 2.9 million active accounts, taking its total to just shy of 40 million. The company also said its Roku Channel recorded a 100% increase in streaming hours year over year and that its overall streaming hours increased by 1.6 billion hours over the previous quarter to a record 13.2 billion hours. Holmes said that Roku is seeing 3.5 hours of streaming per account per day.

At the same time, with most professional sports on hold and unemployment level spikes putting increased strain on consumer budgets, pay TV experienced yet another round of massive video subscriber losses during the first quarter.

According to media analyst firm MoffettNathanson, traditional pay TV subscriptions dropped by 1.8 million in the first quarter, which is now the worst quarter on record and good enough to put the annual rate of decline on a 7.6% pace.

Craig Moffett said that what is “perhaps more distressing” than the elevated rate of traditional TV subscriber declines is that virtual MVPDs couldn’t pick up any of the slack. The firm estimated that U.S. vMVPDs lost a combined 341,000 subscribers and that the approximately 500,000 subscribers from PlayStation Vue (which shut down during the first quarter) don’t seem to made their way to other vMVPDs.