Online video is a supplement to traditional television rather than a replacement, according to research published by the Consumer Electronics Association. A separate survey by Mintel suggests that the streaming media boom for television and movies is only just beginning, as nearly half of all online adults binge on online video.

The first America study, Video Content Discovery and Purchasing Trends, concludes that “While online video streaming is more common among younger consumers ages 18-34, use of traditional television programming is consistent for most age groups, suggesting that these emerging online services are being used in addition to, rather than instead of, traditional television programming.”

The CEA suggests that the main ways that people discover television shows are still through channel surfing, on-screen programme guides, television promotions, word of mouth and the web sites of television networks.

The report also notes that over half of consumers said they like to own a physical disc rather than a digital download, although over three quarters had purchased some form of digital video material. The top reasons given include the ability to access it from anywhere, ease of storage, price, instant access and the ability to watch on a network connected device.

Meanwhile, research from Mintel suggests that 46% of all online adults in the United States watched online video using a subscription account in the previous month, rising to 71% of those aged 18-34.

While 41% of respondents said they were only interested in watching television shows or movies online if they are provided free of charge, conversely 59% are open to paying directly. Similarly, only 24% prefer to sit through commercials in order to view for free, suggesting that when given the option around three quarters would be willing to pay to watch rather than have their viewing interrupted by commercials.

Netflix is the clear leader for subscription usage, with about a quarter of all households in the United States having a Netflix subscription. In the Mintel survey, 36% of all adults had used it in the past month, more than three times the usage of the nearest competitor.

Mintel observes that original production is a means of differentiation, with Netflix, Hulu and Amazon all commissioning their own productions.

Unlike a television network, which needs to feed its channel schedule, an online service only needs just enough original programming to encourage continued membership.

Billy Hulkower, senior technology analyst at Mintel, observed: “The strategy followed by HBO in the 1990s presents perhaps the best model for streaming subscriptions — producing a small number of high-concept, high-production-value series and special events.”

What is notable from this is the very different mind set required for programming a subscription service rather than scheduling a television channel.

A subscription service can precisely target individual subscribers with personal recommendations and provide just enough choice and novelty to justify the value of the subscription, irrespective of how much it is actually used.

In contrast, even a niche channel must amass an audience, which needs to be made aware of what is on when and persuaded to watch it, either there and then or at some other time, while every other channel and medium is competing for their limited time and attention.

The Consumer Electronics Association report, Video Content Discovery and Purchasing Trends, is based on an annual online survey of 1,000 adults in America. The Mintel report, Streaming Media: Movies And Television – US – December 2013 is based on survey data from September to October 2013.