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Upside Growth for U.S. OTT Video Streaming Market

The American video entertainment realm has continued to evolve during 2015. Market development in the traditional pay-TV sector has been particularly difficult. However, there are still some significant upside opportunities.

Baby Boomers comprise nearly a third of U.S. adult broadband users and are significantly more likely than other segments to subscribe to traditional pay-TV services.

According to the latest TDG Research study and data-driven analysis of this vital but oft-overlooked consumer segment, this makes them excellent candidates for the high-revenue sales of operator value-added services.

As TDG first noted earlier this year, the race-to-the-bottom that currently defines pay-TV operator strategy -- that is, the targeting of Millennials with low-cost bundles -- has deflects marketing resources away from efforts to grow ARPU among other subscribers.

"Unlike Millennials, Broadband Boomers are quite loyal to their current operators and have very deep pockets," says Nick Beyer, analyst at TDG.

TDG believes that Boomers are typically less tech-savvy than younger consumers, but they are increasingly connected. The question, then, is how can pay-TV operators better tap into the specific needs of this market segment.

TDG study findings indicate that 57 percent of Broadband Boomers have a net-connected TV set. Moreover, time spent viewing streaming video on a TV set is increasing among this segment.

Among smart TV users, 59 percent of Boomers report an increase in TV streaming over the last year. The same holds true for all streaming devices used by this market segment.

According to the TDG assessment, that's potentially good news for over-the-top (OTT) TV service providers, who have plenty of growth headroom among this segment.

Furthermore, the adoption of Netflix among this segment is currently 36 percent, which means that close to 40 percent of those Boomers with connected TVs have yet to subscribe to a streaming OTT video service.

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