November 23, 2020
The launch of new subscription video-on-demand services this year has resulted in more households subscribing to multiple services. New data from Parks Associates found 61% of domestic households subscribe to two or more OTT services as of the third quarter (ended Sept. 30), up from 48% the previous-year period.
The report contends 45% of homes subscribe to three or more, up from 27%, and 31% subscribe to four or more, up from 14% — largely due to the rise in service stacking and the impact of new services, including Disney+, HBO Max, Peacock, and Apple TV+, plus an expanded CBS All Access, on the dominant Big 3 in OTT: Netflix, Amazon Prime Video, and Hulu.
“The term ‘streaming wars’ has been used for the past several years to describe the battle between high-profile SVOD services to capture revenue and viewership among U.S. video consumers,” Steve Nason, research director, said in a statement. “So far the main battle has been among Netflix, Amazon Prime Video and Hulu, with other services primarily acting as complements. Now other services from major players are vying to become a core video service in the U.S., which represents the first real threat to the [SVOD] hierarchy.”
Indeed, a year ago saw the launch of Disney+ and Apple TV+. WarnerMedia’s HBO Max launched at the end of May this year. NBCUniversal’s hybrid ad-based/SVOD service Peacock fully launched in mid-July and is a formidable threat to the top tier of OTT services. ViacomCBS is in the process of expanding its highly successful CBS All Access service, which will become Paramount+ in early 2021.
Parks notes that the coronavirus pandemic further stirs up competition at the top of the OTT ecosystem, as viewers are suddenly spending more time at home, with entertainment options outside the home severely limited. Consumers are also facing an economic crisis that could drive them to limit their household spending, although people so far are showing a willingness to maintain multiple OTT subscriptions at once.
“Clearly, the five main challengers to the Big 3 are having a direct impact on the service stack of OTT consumers,” Nason said. “These services are primarily responsible for building up the OTT video portfolio by filling in important content gaps not currently being delivered by the Big 3 and other services. As these challengers continue to be more fully integrated into the market, their impact on the video consumer service stack will continue to grow.”