October 13, 2020
As the coronavirus pandemic continues, resulting in disruptions to traditional entertainment distribution such as movie theaters, subscription video-on-demand has solidified its position as a clear consumer favorite in the entertainment landscape, according to new data from Futuresource Consulting.
Based on surveys with more than 20,000 respondents across the U.S., Canada, U.K., Germany, France, Italy, Spain, Sweden, Australia and Japan, London-based Futuresource found a marked increase in transactional digital video-on-demand purchases of movies as well.
“There’s no doubt that recently launched services like Disney+ have boosted both SVOD usage and uptake,” principal analyst David Sidebottom said in a statement. “However, it is the growth of sector stalwarts Netflix and Amazon Prime Video which are driving the overall reach of SVOD.”
The report suggests a 3% to 4% increase SVOD viewing as a proportion of total video consumption in 2020 compared to 2019. In the U.S., SVOD now accounts for over one in every four viewing hours — largely driven by those under 45 years of age. In addition to SVOD, many European markets have also witnessed an increase in free live TV consumption, accentuating its continued importance, particularly during times of uncertainty.
That said, Netflix, Prime Video and Disney+ continue to be the trendsetters, with the latter helping drive new levels of OTT video service stacking.
“Our research shows that over 90% of Disney+ subscribers are existing Netflix users, adding a new layer of growth to the SVOD environment,” Sidebottom said.
Meanwhile, purchases and rental of digital movies and TV shows continues to see increased traction. In the U.S., almost 33% of respondents had bought or rented a digital movie or TV show from mid-March through July. The results show that VOD rentals are back in focus, with three quarters of respondents renting a digital movie.
Notably, Futuresource found that upwards of 20% of respondents buying or renting digital movies and TV shows were new consumers, in addition to those revisiting transactional VOD for the first time in a while.
“This re-emphasizes how much consumer behavior has changed due to prevailing market conditions, helping to broaden the reach of these categories,” Sidebottom wrote.
Indeed, with few new releases in movie theaters or on home video, consumers are embracing library titles. Month-on-month catalog sales continue to advance, and more than 80% of digital movie rental transactions involved a title that was more than six months old. Survey results suggest that catalog digital movie sales and rentals were typically driven by emotive impulses, such as wanting to watch an old-time favorite or a feel-good movie, either to provide escapism or just for pure nostalgia.
“The industry must now turn to strategies that keep consumers engaged across both SVOD and transactional digital video,” Sidebottom said. “From here on into 2021, it’s all about maintaining the momentum that has been born from lockdown and social distancing measures.”