Global OTT Video Subs to Top 265 Million by 2022

Spearheaded by Netflix and Amazon Prime Video, the number of global households with an over-the-top video service subscription will exceed 265 million by 2022, according to new data from Parks Associates.

The research firm contends OTT video use is being driven by increasing household adoption of connected media devices such as smart TVs, tablets and smart phones.

“Fifty-three percent of U.S. broadband households own a smart TV, and both smart TVs and streaming media players are continually improving the user experience to accommodate the shifting habits of consumers, including integration with voice-based digital assistant ecosystems,” Kristen Hanich, analyst at Parks, said in a statement. “The rise of these digital assistants is another key trend over the last few years, with Apple Siri, Amazon Alexa, Google Assistant, Microsoft Cortana, and Samsung Bixby, among others, now on the market. Both smart home and connected entertainment developers are working to integrate this functionality into their products.”

Parks contends consumers now own an average of 8.6 connected CE products in their home, an 87% growth in the average volume of devices since 2010. Additional research shows that more than 70% of U.S. broadband households have an Internet-connected entertainment device; 17% own both a smart home device and an internet-connected entertainment device.

Parks estimates over 265 million households worldwide will have a total of more than 400 million OTT video service subscriptions by the end of 2022. Much of it driven by household adoption Internet-connected appliances.

“Consumers prioritize general device interoperability over staying within a specific brand ecosystem when considering a purchase,” said Jennifer Kent, director, research quality & product development. “Three-fourths of consumers find it important to consider any smart home product brand that will work with other products in their home and 49% find this very important.”



German SVOD Market Growing

Among Western European countries, Germany and France have been slow to adopt subscription streaming video, including Netflix and Amazon Prime Video. That appears to be changing in Germany.

At the end of 2017, 18% of all German households were subscribing to at least one paid video-on-demand service, according to new data from The market appears to be on a growth trajectory. Total revenue at the end of 2017 amounted to €1.1 billion and are anticipated to more than double within only five years, climbing to €2.5 billion by 2023.

Amazon Prime Video and Netflix continue to lead the pack in the German VOD market. Other players are British satellite TV operator Sky, Maxdome, Apple iTunes and Google Play. Specialist sports streaming services such as DAZN and Eurosport are also seeing an increase in users.

Goldmedia said SVOD services account for the highest share of turnover in the German VOD market with a market share around share of 74%, growing to 80% share by 2023.

Similar to the U.S., Amazon and Netflix are focusing heavily on producing original content in Germany. Goldmedia said licensed titles streamed via transactional VOD and electronic sellthrough are also popular among users, notably theatrical movies available to view on-demand just months after they have been released in cinemas.

The report said other key market drivers include access to content via smart TVs or special streaming devices such as the Amazon Fire TV Stick. The growing number of German households with high-speed broadband connections is also boosting VOD’s technical reach.

The rural market is continuing to play catch-up and is projected to be a major source of market growth going forward. Goldmedia predicts that every other household with a broadband connection will subscribe to a VOD service by 2019.

Unlike the U.S., major sports programming in Europe is increasingly going online. The first match of the 2017/2018 Bundesliga soccer season could only be viewed online via Eurosport’s streaming media device.

Amazon just announced an exclusive streaming deal with the U.K.’s Premier League, beginning in 2019.

FilmRise Acquires Exclusive U.S. SVOD Rights to ‘CHiPs’

FilmRise has acquired from Warner Bros. Domestic Television Distribution the exclusive U.S. SVOD rights to the 1970s TV show “CHiPs,” starring Erik Estrada and Larry Wilcox, according to the company.

The show is available on Prime Video, through FilmRise’s Prime Video Direct self-service program.

“We are thrilled to have concluded a deal with Warner Bros. to bring this classic television favorite to Amazon’s Prime Video audience,” said FilmRise CEO and co-founder Danny Fisher in a statement. “The show is a perfect fit for the Prime Video service, which boasts an ever-expanding catalog of classic film and TV.”

“CHiPs” ran for more than six seasons on NBC. It followed California Highway Patrol motorcycle officers Jon (Wilcox) and Ponch (Estrada) as they patroled the streets of Los Angeles.

FilmRise has also brought other classic TV shows to the Prime platform, including “Hell’s Kitchen” and “3rd Rock from the Sun.”

Cost, User Experience Driving OTT Video Adoption

With pay-TV subscriptions down 10% among respondents in a new survey from Horowitz Research, the study found just 71% of 18-34 year-olds subscribe to a traditional pay TV service (cable, satellite, or telecom), compared to 75% of 35-49 year-olds and 81% of TV viewers 50 and older.

Although TV viewing remains bullish — respondents watch an average of 6.5 hours of TV a day — the reality that there are many lower-cost services competing for consumers’ video budgets is impacting the perceived cost-benefit ratio of traditional pay-TV.

According to the study, 74% of cable TV subscribers, 78% of satellite TV subscribers, and 80% of fiber TV subscribers say that they are satisfied with their TV service overall.

However, when asked how “worth it” the TV services they subscribe to are, cable, satellite, and fiber TV subscribers are less likely to say that their TV service is worth it compared to most over-the-top services.

Seventy percent of satellite and fiber subscribers and 62% of cable subscribers said their service is worth it; between 8% and 13% said their pay-TV is not worth it. On the other hand, 91% of respondents with Netflix said the service is worth the money; 83% among Hulu subs.

Digital pay-TV providers Sling TV and Hulu with Live TV also fare better than traditional pay-TV, with 79% of Sling subs and 77% of Hulu with Live TV subs voicing their approval.

In addition to exploring the value of TV and video services, the study also asked how interested TV viewers would be in either switching to a service like this from their cable/satellite/fiber service (if they currently had pay-TV service) or subscribing to one (if they did not currently have pay-TV service).

Nearly half (48%) of pay-TV subs expressed interest in online TV; which rose to 58% among 18-34 year-olds. While the data is based on a broad, general description of online TV and may not translate into actual cord-cutting, it does indicate a willingness among consumers to explore these services, and cost plays a major role.

Nearly 93% of respondents interested in online TV cited lower cost as a key factor. In addition, viewing and tech features among OTT services remains highly valued and, in many cases, more user-friendly than many linear TV set-top box guides.

“Over-the-top services like Netflix, Hulu, and Amazon Prime are … essentially VOD ‘on steroids,’ and they have tended to supplement, rather than cannibalize, services offered by traditional providers,” Adriana Waterston, SVP of insights & strategy for Horowitz, said in a statement.

“[Online TV does] compete directly with traditional providers by offering television, including sports and local channels in many markets, DVR service, and other elements of traditional TV, but for a lower price and with the app-driven, consumer-friendly OTT experience. It is incumbent on traditional players to continue to assert their value proposition at the same time as they pivot their businesses to serve consumers’ evolving expectations.”


Facebook-Owned Instagram Eyeing Original Video Content

Looking to compete in the long-form video space, social media photo app Instagram reportedly is eyeing third-party content deals.

In an attempt to supplement Facebook’s (which owns Instagram) Watch platform, while competing with Snapchat Discover and YouTube, Instagram is targeting music videos and other scripted programming for a platform launching sometime this month, according The Wall Street Journaland TechCrunch, which cited sources familiar with the situation.

Launched in 2010, the photo and video-sharing social networking service claims to have more than 800 million users, including about 500 million daily users.

Original video content on Instagram would not rival Netflix, Amazon Prime Video or Hulu, which collectively are spending billions of dollars generating TV shows and feature-length movies.

Instead, programming would follow the Watch strategy, which include just-announced news show launches from ABC, CNN, ABC and Fox.

“We have pushed intensely over the last six months to emphasize quality over quantity,” Campbell Brown, head of global news partnerships at Facebook, told CNNMoney. “This is another investment in quality news on Facebook.”

While current Watch programming include reality series, “Ball in the Family,” and comedies, “Strangers” and “Loosely Exactly Nicole,” among others, reports suggest questionable viewership despite Facebook’s 138 million daily users.

Notable exception: “Returning the Favor,” which follows Mike Rowe as he travels across the country in search of people who are giving back to their communities. The show reportedly generates 70 million views.

Rowe, who cut his teeth on Discovery Channel series “Dirty Jobs” and CNN series, “Somebody’s Gotta Do It,” has more than 5 million Facebook “friends.”



Amazon Introduces Voice-Controlled Fire TV Cube

Amazon June 7 announced Fire TV Cube, a hands-free 4K Ultra HD streaming media player with Alexa, allowing consumers to control their TV “from across the room,” according to the company.

Fire TV Cube uses multi-directional infrared technology, cloud-based protocols and HDMI CEC, that—combined with Alexa—let viewers control their compatible TV, sound bar, A/V receiver, and cable or satellite box. Consumers can use voice commands to turn the TV on and off, change the volume, switch to different inputs, and change the cable channel. Even with the TV off, consumers can ask to watch a show and the Fire TV Cube powers on the TV and starts playback where consumers left off.

Amazon Fire TV Cube gives consumers access to the catalog of content currently available on Fire TV, including tens of thousands of channels, apps, and Alexa skills, as well as more than 500,000 movies and TV episodes and thousands of 4K Ultra HD and HDR titles, according to the company. Consumers can use voice commands to access services such as Netflix or to switch the cable channel.

“We believe voice makes it easier for customers to control their entertainment systems and watch the TV and movies they care about,” said Marc Whitten, VP of Fire TV. “And, it’s just the beginning. Amazon Fire TV Cube will only get better over time with the Alexa service always getting smarter.”

With the Fire TV Cube, consumers can also use voice commands to find the movies and TV shows by such categories as genre, director and actor.

WIth Fire TV Cube, many Alexa responses are optimized for the big screen and accompanied with rich visual information, allowing consumers to view smart home camera feeds, watch video flash briefings, view sports scores, see extended weather forecasts, and watch trailers for movies playing in nearby theaters, according to Amazon.

Amazon Fire TV Cube is available for pre-order starting June 7 for $119.99 and ships with an IR extender cable and Ethernet adapter beginning on June 21. As an introductory offer, Prime members can pre-order Fire TV Cube on June 7 and 8 for a special price of $89.99 — a $30 savings. For a limited time, customers can pre-order Fire TV Cube and Amazon Cloud Cam together for $199.98 — a $40 savings. Customers who purchase and register their Fire TV Cube by July 1, will also receive a $10 credit for Prime Video. Starting on June 21, Fire TV devices are eligible for unlimited access to tens of millions of songs with Amazon Music starting at just $3.99/month.

For more information visit

Amazon Ups Sports Streaming with U.K. Premier League Soccer Rights

In a major move, Amazon June 7 announced that beginning in 2019 it would begin streaming live Premier League soccer matches and weekly highlights packages on Prime Video in the United Kingdom.

No financial details of the deal were released, but media reports suggest Amazon could be paying upwards of $12 million per soccer match.

The Premier League claims to be the most-watched sports league in the world, and U.K. Prime members will have exclusive access to 20 matches per season, comprising two full fixture rounds – the first December midweek round and the festive Bank Holiday round – featuring live coverage of every Premier League team.

This will be the first time a full round of Premier League fixtures will be broadcast live in the U.K. In addition, Prime members will be able to watch weekly highlights of all Premier League matches throughout the season.

“Amazon is an exciting new partner for the Premier League and we are very pleased they have chosen to invest in these rights,” Richard Scudamore, executive chairman of the Premier League, said in a statement.

The Premier League joins Prime Video’s growing slate of live sports, including U.S. Open Tennis, ATP World Tour Tennis and the NFL, all currently available to watch on Prime Video in the UK at no extra cost to Prime members.

Premier League matches will also be available alongside Prime Video’s critically acclaimed and award winning Prime Original drama, comedy and sports docu-series.

“We are always looking to add more value to Prime, [including] for the first time, live Premier League matches,” said Jay Marine, VP of Prime Video in Europe.


Report: SVOD Shakeout on Tap?

Are there too many SVOD services?

Following a record year of 34 notable streaming launches in 2015, 2017 saw the debut of only 10 such services. And in a new study from L.E.K. Consulting, four out of every five consumers reported having just the right amount of video subscriptions.

“Despite the prevalence of cord cutters, subscription streaming services are now the ones that will need to adapt to survive,” stated Alex Evans, managing director in L.E.K.’s media and entertainment practice and co-author of “OTT in Transition: Finding Success in Subscription Video.”

“While the big players, like Netflix, are already winning, we expect genre-based services that successfully cater to niche tastes will also have a role to play,” he said in a statement. “Niche services will need to continuously update high-quality content, while ensuring their programming will resonate with their fickle audience. And larger video streaming platforms must keep an eye on what both traditional TV and emerging players are doing so they themselves don’t get disrupted by innovative content and pricing options.”

Among the dynamics subscription streaming video content providers will need to navigate, according to the L.E.K. report, are:

  • OTT consumers expect more for less — just like music fans who left pricey CDs behind for cheap streaming audio services — and are unlikely to add features that are not truly unique.
  • Targeted content and budget pricing do not guarantee success, as noted by the suspension of NBC’s $3.99 per month SeeSo comedy streaming service after less than two years.
  • Consumers are at the point where aggregators of these services (platforms that centralize a number of streaming subscriptions into one account) are of immense appeal, similar to why and how cable bundles came about. Millennials alone were found to simultaneously carry at least six different services each, with their preferred model of consumption being aggregator services.

More than 3 million U.S. consumers left pay TV behind in 2017 — a threefold increase in the past two years — dropping cable subscribership to less than 80% of households for the first time in 15 years, according to industry research cited by L.E.K. But the L.E.K. study points out these cord cutters are not actually consuming less video content. In fact, by 2020, the “big three” subscription providers (Netflix, Hulu and Amazon Prime Video) are expected to approach a combined 200 million U.S. subscriptions.

“What we’re seeing is a continued, steady movement away from traditional TV consumption, largely driven by millennials,” Evans said in a statement. “We found through our research that the primary factor behind this is cost. Pay TV packages can easily cost $75 to $100 per month, whereas a monthly web-based streaming plan might be $10. It’s worth noting, though, that overall savings may not be as much as planned, considering most consumers will lose their bundle discount on broadband when dropping cable. That, plus aggregating multiple streaming services together, can really start to add up.”

Despite the Hype, Out-of-Home Video Consumption Remains Small

NEWS ANALYSIS — Pay-TV distributors and over-the-top video platforms have long pushed for mobile video consumption in an effort to expand viewership and market size.

New data from IHS Markit suggests out-of-home video consumption is still a minor activity — even among Internet users between the ages of 17 and 24 who seemingly can’t exist without their smartphones.

More than 50% of Internet users surveyed in the United States, United Kingdom, Brazil, Japan and Germany watched video content out of their homes at least once a month, according to the study conducted in the first quarter of 2018.

Of those viewers, nearly 17% did so on a daily basis. Among the previously-mentioned younger demo, 80% viewed video content outside the home at least once a month, with a quarter doing so on a daily basis.

That also means the vast majority of respondents DO NOT view video outside the home or on portable devices.

IHS correctly contends pay-TV operators are expanding distribution of their multiscreen services across devices and bringing third-party apps onto their own set-top boxes. The latter is true only for in-home consumption.

“In the U.K., Virgin Media customers are twice as likely to have a Netflix subscription than Sky TV customers, highlighting the benefits of content discovery integration,” said Fateha Begum, associate director for connected devices and media consumption at IHS Markit.

Indeed, more than half of survey respondents said watching video on their mobile devices was “somewhat or very important,” rising to 75% among those aged 17 to 34.

Yet, that same demo also said they only used multiscreen services on a smartphone or tablet “at least once a month,” compared with 50% among those aged 35 to 54.

“At least once a month” does not portend a trend or paradigm shift in video consumption.

YouTube, Netflix and Amazon were the most popular video platforms in the five countries surveyed — beating pay-TV and video-on-demand services.

In the Netflix earnings call in April, CEO and co-founder Reed Hastings said apps represented the new TV network.

“All apps on your phone will have some form of video, or most apps will,” Hastings said. “And so, you just see a very wide spread of entertainment options, some of which are movies and TV shows, some are more interactive.”

All true, except accessing that video on mobile devices takes data. Lots of data. And data costs money — a challenge to younger demos.

Indeed, IHS said the popularity of these platforms varied according to geography. For example, YouTube was the most popular service in Japan, with 84% reporting it as their first choice when looking for something to watch, while Sky TV in the U.K. was the only pay-TV operator to maintain the top position in any country surveyed, with 30% of respondents claiming it their first choice.

“The extensive reach of online video platforms, covering customers from across the various pay TV platforms and devices, threatens pay-TV service viewership and value perceptions,” said Begum. “Bringing online video services to set-top boxes allow pay-TV operators to maintain and control their customer relationships and experiences, while presenting their platforms as the best way to find and view the widest variety of content.”

Again true, but not outside the home.

Morgan Stanley: Netflix Tops in Original Programming

With Netflix spending upwards of $8 billion on original content this year, it might be relieved to know consumers reportedly appreciate the product, according to Morgan Stanley.

The investment bank – and Netflix financial advisor – found that 39% of survey respondents felt Netflix offered superior original programming compared to HBO (14%), Amazon Prime Video (5%), Hulu (4%), Showtime (3%), Starz (2%) and Cinemax (1%).

Morgan Stanley citied Netflix programs such as “Stranger Things,” “House of Cards,” “Black Mirror,” and “Lost in Space,” for driving consumer interest.

HBO hitmakers include “Game of Thrones,” and “Westworld.”

The online survey of 3,100 respondents was conducted in March.