Report: Global SVOD Revenue to Increase 25% to $36 Billion This Year

A new report from Futuresource Consulting found that mainstream adoption of subscription streaming video continues to grow worldwide – reaching 60% of households in North America, 26% in Western Europe, 21% in Asia-Pacific and 19% in LATAM.

“SVOD has come of age, with consumer spend exceeding $29 billion last year, up 38% on 2017,” principal analyst David Sidebottom said in a statement.

The analyst cited improving broadband quality, smart TV penetration, availability of services and perceived consumer value.

Netflix and Amazon Prime Video accounted for 33% of all subscriptions globally in 2018 – but almost 66% total consumer spending on SVOD.

Disney’s acquisition of Fox, along with the completion of AT&T’s acquisition of Time Warner and pending OTT platform bow from WarnerMedia will further shape the SVOD landscape in the U.S. and, in the longer term, worldwide, according to London-based Futuresource.

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“Consumers are seeking a combination of functionality, high-quality original content and low price,” says Sidebottom. “Netflix has demonstrated continued growth in both its primary markets of the U.S. and U.K., as well as France and Germany. Plus, Netflix has many options for turning profit, each requiring a local market-specific strategy, based on maturity of infrastructure, device usage, access to local content, GDP and market share.”

Indeed, the report contends competitors to Netflix continue to underperform, with complementary services standing better odds of success.

Futuresource said exclusive, relevant and local content, particularly outside the U.S., is requisite to capturing and holding audience appeal.

While the uptake of multiple OTT services will continue to drive overall subscription numbers, the market will be limited to a small number of clearly differentiated and complementary services. This makes a carefully defined market and content strategy even more crucial, according to the report.

“Consumers face an increasingly confusing video landscape,” Sidebottom said.

He said Amazon Channels and pending Apple TV+ are both well-placed to succeed in the increasingly fragmented world of aggregation, but both currently lack “ubiquity of content” internationally.

“This new breed of ‘super aggregators’ will become an important component in the battle for the living room TV, though, in many instances, they have yet to fully realize the three consumer requirements, including quality, original content and price,” Sidebottom said.

 

 

‘Sabrina’ Casts a Spell Over Parrot Analytics Digital Originals Chart

The April 5 debut of a new batch of episodes helped push Netflix’s “Chilling Adventures of Sabrina” to the top spot on Parrot Analytics’ digital originals chart for the week ended April 13, up from No. 14 a week earlier.

The show, a dark adaptation of the teenage witch character from Archie comic books, registered 53.5 million average daily Demand Expressions, the proprietary metric used by Parrot Analytics to measure global demand for TV content, representing a 143% spike from the previous week.

Netflix’s “On My Block” maintained the No. 2 spot with 36.1 million expressions, down 16.6% from the previous week.

Hulu’s crime anthology “The Act” rose to No. 3 from the fourth spot a week earlier, though its expressions dropped 17% to 34.8 million.

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Netflix’s “Stranger Things,” the previous week’s top title, dropped to No. 4 with 33.2 million expressions, down 27.9% for the week.

Amazon Prime Video’s “Hanna,” based on the 2011 movie of the same name, jumped to No. 5 with a 12.9% jump in expressions to 32.1 million.

YouTube Premium’s “Cobra Kai” re-joined the top 10 in advance of the April 24 premiere of its second season. A 23.8% jump to 29.95 million expressions pushed it up from No. 12.

The Demand Expressions metric draws from a wide variety of data sources, including video streaming, social media activity, photo sharing, blogging, commenting on fan and critic rating platforms, and downloading and streaming via peer-to-peer protocols and file sharing sites.

A “digital original” is a multi-episode series in which the most recent season was first made available on a streaming platform such as Netflix, Amazon Prime Video or Hulu.

Media Play News has teamed with Parrot Analytics to provide readers with a weekly top 10 of the most popular digital original TV series in the United States, based on the firm’s  proprietary metric called Demand Expressions, which measures global demand for TV content through a wide variety of data sources, including video streaming, social media activity, photo sharing, blogging, commenting on fan and critic rating platforms, and downloading and streaming via peer-to-peer protocols and file sharing sites.

The Roku Channel Adds HBO, Cinemax

Roku April 4, announced that HBO and (soon) Cinemax are available as add-on third-party subscriptions on The Roku Channel. HBO joins an array of more than 25 premium subscriptions already available on The Roku Channel.

The Roku Channel provides users access to 10,000+ free, ad-supported movies and TV episodes as well as third-party premium subscriptions. It is a top 5 channel on the Roku platform by active account reach. The channel’s easy-to-navigate, content-first interface, allows users to discover free, ad-supported entertainment as well as premium services in a single destination without having to switch between multiple streaming channels.

“The Roku Channel delivers a single destination to discover great free, ad-supported and premium subscription entertainment,” Rob Holmes, VP of programming and engagement, said in a statement. “We are expanding premium subscriptions by making HBO more easily available to The Roku Channel’s highly engaged user base.”

The Los Gatos, Calif.-based streaming media device manufacturer’s 27 million users can trial HBO for free for seven days. Following the seven-day trial, subscribers will be charged $14.99 per month.

The Roku Channel offers a single destination for both free (ad-supported) and premium movies and TV shows. Customers can browse all content, even those from premium subscription services, without needing a subscription.

Users ready to subscribe via The Roku Channel can take advantage of “one-click” signup and subscriptions can be managed through the “My Account” section on the website. Premium subscriptions are only viewable within The Roku Channel.

“The Roku Channel users will have a chance to watch the final season of “Game of Thrones” on their favorite platform,” said Jeff Dallesandro, SVP, worldwide digital distribution and new business development, HBO.

 

Comcast Launches $5 Streaming Video Service with Netflix and Movies Anywhere Access

Comcast Cable has finally joined the over-the-top video ecosystem with the launch of Xfinity Flex — a $5 monthly service offering Xfinity broadband-only subscribers direct access (for a separate fee) to Netflix, Amazon Prime Video and HBO Now, in addition to ad-supported content, and digital movies for sale and rent.

Xfinity Flex comes with more than 10,000 free online movies and TV shows — including live streaming TV — from ESPN3, Xumo, Pluto, Tubi TV, Cheddar, YouTube and more.

The service features an integrated guide and voice control, enabling customers to browse and access programming across Netflix, Prime Video, HBO, and Showtime, rent and purchase movies and shows from the digital store, access their digital lockers across platforms by pairing their account with Movies Anywhere, or listen to music from Pandora, iHeartRadio, and XITE.

And soon, Xfinity Flex subs will be able to upgrade to the full Xfinity X1 cable service from the guide, which offers hundreds of live channels, tens of thousands of on demand titles, and a cloud DVR.

The service comes as Apple and Disney ready branded OTT video platforms, with WarnerMedia slated to launch a competing service in 2020.

“[The Internet] is becoming the center of gravity as we move more and more toward connectivity,” Matthew Strauss, EVP of Xfinity Services told CNET, which is owned by CBS Interactive.

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Strauss said the service would underscore Comcast’s ongoing strategy tying the Internet and television through the cloud-based Xfinity set-top.

“[We want consumers] to start thinking of the television as a digital display,” Strauss said.

Specifically,  Xfinity Flex will be packaged with an Internet-connected, 4K HDR streaming TV device, which includes a voice remote, integrated guide for accessing popular streaming video and music choices, as well as Comcast’s home WiFi, mobile, security and automation services.

“Xfinity Flex will deepen our relationship with a certain segment of our Internet customers and provide them with real value,” Strauss said.

As more connected devices, streaming choices, and smart home services come online, Xfinity Flex will provide customers with an easy way to better manage, control and enjoy the connected home as it continues to grow.

 

 

Purdue University Bans Netflix, Other Streaming Use in Classrooms

Purdue University has begun banning students from accessing streaming video services such as Netflix, Hulu, Amazon Prime Video and YouTube in classrooms.

The reason: Burgeoning streaming video and music service use during classes had slowed the school’s Wi-Fi speed to a crawl and was distracting students.

What began as an experiment in the fall expanded across the West Lafayette, Ind., campus March 18 as students returned from spring break.

“There’s a finite amount of bandwidth available,” Mark Sonstein, executive director of IT infrastructure at Purdue, told the Chicago Tribune. “If you have people who are streaming a movie, then they are consuming all of the available bandwidth.”

While many high schools and middle schools routinely collect cellphones from students before classes, Purdue reportedly is one of the first universities to erect a tech barrier.

“I heard about the bandwidth problem, but when the solution was implemented, I heard crickets,” said chemical engineering professor Steve Beaudoin.

Indeed, student reaction to the ban has been scant as most aren’t streaming episodes of “True Detective” or “Game of Thrones” during Chem 101, despite sitting in a lecture hall that seats 100.

Nineteen-year-old computer science sophomore Nick Pappas told the Tribune he doesn’t believe SVOD use in classrooms is as common as school officials contend. But he has seen some students engage – especially if they have wireless earbuds.

“People can get away with it so easily,” he said.

“If the bulk of the students participate, either because they agree with the purpose of the program, or because they aren’t inclined to take the steps necessary to circumvent it, then the purpose — freeing up bandwidth for academics — will be achieved,” Sonstein said.

 

 

Study: U.S. SVOD Buyers Average 3.4 Services

Online video subscribers in the United States average 3.4 streaming services and pay an average of $8.53 per month per service, according to a new study.

The nScreenMedia study, “Keep My Customer — Why Consumers Subscribe To, Stay With, Cancel, and Come Back to Online Video Services,” also found that 70% of households in the United States and 40% of U.K. homes have a subscription to at least one streaming video service.

The study was commissioned by Vindicia, an Amdocs company providing business-to-consumer digital services monetization.

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Involuntary cancellation is a problem for the industry, according to the study. These payment failures occur when a credit card problem, such as insufficient funds, results in automatic cancellation of a customer. The study revealed that more than a quarter of U.S. and a third of U.K. online video streamers have had a SVOD service canceled due to a credit card problem. And of those groups, 30% did not return to the service.

“Involuntary cancellations are a huge problem for the SVOD industry, particularly among young subscribers,” said study author Colin Dixon, founder and chief analyst at nScreenMedia, in a statement. “Young adults from 18 to 34 years old are twice as likely to have experienced involuntary cancellation in the U.K., and three times more likely in the U.S.”

“For video streaming services, the ability to acquire and retain subscribers is vital to their success,” said Anthony Goonetilleke, group president, media, network and technology, Amdocs, in a statement. “However, streaming services are losing subscribers — and millions of dollars in annual revenue — due to involuntary credit card cancellations. This kind of customer churn is largely preventable. By leveraging the right technology, video streaming providers can recover failed payment transactions and capture revenue that would otherwise be lost, enabling them to better compete in a highly competitive market.”

In terms of overall cancellations, the survey looked at how often people cancel their service and their reasons for doing so. In the United States, 38% of the survey group said they have canceled one or more services in the last year. Of that group, two-thirds said they had canceled one service only, and just one in 10 have canceled three or more services.

Netflix users are slightly less likely than average to have canceled service in the last year, according to the study, while Hulu users are slightly more likely. Amazon Prime Video users are no more or less likely than average.

The top two reasons cited for canceling a video service: people couldn’t find enough content they liked and didn’t find the service a good value for their money.

Previous customers are the best new prospects, as the study found that 33% of U.S. and 25% of U.K. cancellers have been persuaded to sign up for service again.

Discounted subscriptions are an under-exploited opportunity for service providers to win new customers. The survey revealed that a 20% discount for a three-month commitment generated the highest interest level, with 66% of U.S. and 57% of U.K. subscribers saying they were likely or extremely likely to take the offer. Three months is an important milestone, because subscribers that stay this long are much less likely to leave the service. Surprisingly, the study found that offering more than a 20% discount did not result in more interest.

The study also found that free-trial abuse is not a serious problem for online video service providers. While 49% of U.S. and 62% of U.K. online video subscribers have canceled at least one service within the free trial period, only 5% in the U.S. and 2% in the U.K. have canceled within the free-trial period four or more times in the last year.

When it comes to retaining existing subscribers, content is king. The study found that 64% of U.S. subscribers and 55% of U.K. subscribers have been with their longest-tenured service for one year or more. When asked why they stay, respondents said having plenty of interesting content to watch was the top reason. Value for money was a close second place, and ease of finding something good to watch came in third. Interesting original content was the fourth reason, while providing plenty of new shows took the fifth-place spot.

Meanwhile, Amazon’s expanding influence in the VOD market is evident. The study found that one-third of U.K. and U.S. Prime Video subscribers have purchased an add-on video service, with higher income individuals more likely to use Amazon Prime Video and to purchase an add-on. In the United States, the most popular video add-ons are premium services such as HBO, Starz, Showtime and Cinemax. CBS All Access is also very popular. In the United Kingdom, the most popular video add-ons are Eurosport Player, Discovery, ITV Hub+ and FilmBox.

To learn more about the nScreenMedia study or to download a copy, visit here.

Reed Hastings Welcomes Pending Netflix SVOD Competitors

Netflix co-founder/CEO Reed Hastings has steadfastly championed new competitors in the burgeoning subscription streaming video-on-demand ecosystem.

With the arrival of an Apple streaming video service expected to be announced on March 25 — without Netflix, according to Hastings — followed by Disney+ at the end of the year, and over-the-top platforms from WarnerMedia and Comcast in 2020, Netflix is about to get its most-serious streaming competition since launching OTT service in 2007.

Hastings, per usual, is taking it all in stride.

“We will make this a better industry if we have better competitors,” the CEO told attendees March 18 at Netflix’s Los Angeles headquarters. “All we have to do to succeed is to continue to stream great content and not get too distracted.”

Indeed, with the service projected to reach 148 million paid subscribers worldwide by the end of the first quarter (ended March 31), Netflix has effectively become the largest pay-TV service globally.

At the same time as subscribers consume increasing amounts of original and third-party content, Netflix is winning the battle for OTT video eyeballs.

“I think of it as us winning time away — entertainment time — from other activities,” Hasting said in January on the fourth-quarter webcast. “So, instead of doing Xbox and Fortnite or YouTube or HBO or a long list, we want to win and provide a better experience, [with] no advertising, on-demand [and] incredible content.”

The executive said Netflix — unlike branded services such as HBO, Showtime and Starz — offers content across a wide spectrum genres and interests, which Hastings characterized as a well-balanced stock portfolio.

“We compete so broadly with all of these providers that any one provider entering only makes a difference on the margin,” he said in January. “So, that’s why we don’t get so focused on any one competitor. I really think our best way is to win more time by having the best experiences in all the things that we do.”

Research: Strong Consumer Interest Expected for Disney+ Streaming Service

Disney’s pending subscription streaming video service is projected to generate wide consumer appeal — if it is priced right, according to new data from The Diffusion Group.

When asked about the likelihood they would sign up for “a Netflix-like service” that included movies from Disney, National Geographic, Pixar, Marvel and Lucasfilm (Star Wars); Disney TV shows for children; and original content, 43% of survey respondents said they were likely to sign up, while 27% very likely to subscribe.

TDG surveyed 1,949 adult broadband users randomly assigning one of three price points for the service, either $5.99, $7.99, or $9.99 per month. Those under the age of 35 are twice as likely as their older counterparts to be strongly interested in Disney+, as are those with children under 18 living in the home.

“Based on our research, Disney+ will enjoy strong early demand,” Michael Greeson, president of TDG, said in a statement.

Greeson said Disney’s streaming service – which is slated for a public unveiling in April – differs from Netflix, Amazon Prime Video and online TV by only offering branded content.

“This is a major studio pooling what is arguably the largest library of high-value content on the planet to populate a single subscription service,” he said.

The report contends Disney+ will be a case study regarding the policy of media companies pulling select content from third-party SVOD providers for their own over-the-top video services.

Indeed, TDG found that while Disney+ appeals to a wide range of consumers, interest varies within several key segments.

Legacy pay-TV subscribers are more strongly interested in Disney+ than both cord-nevers and cord-cutters; Hulu subs are more likely to sign up than are Prime Video and Netflix subs.

“The amount of high-quality content being packed into the offering will make it not only appealing, but very sticky,” Greeson said.

 

Research: Netflix Could Be Losing at Least $2.3 Billion a Year From Account Mooching

Netflix could be losing potential revenue of at least $2.3 billion a year (or $192 million a month at the base subscription price) because an estimated 24 million users mooch off of others’ accounts.

That’s according to a new survey of more than 1,000 conducted by Cordcutting.com.

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At base subscription prices, Amazon Prime Video is losing at least $540 million a year (or $45 million a month) from 5 million moochers and Hulu at least $480 million a year (or $40 million a month) from 5 million sharers, according to the study.

Still, more than half of Netflix moochers (59.3%) would pay for the service if they lost free access, while 27.6% of Amazon moochers would pay and 37.8% of Hulu moochers would pay if they lost access.

A parent is the top source for moochers of Netflix and Amazon, while a “significant other” is the top source for Hulu.

Paramount Mining TV Production Gold

Paramount Pictures is in the midst of a turnaround that pledges fiscal-year 2019 (ending Sept. 30) profitability for the first time since 2015.

While the vaunted studio improved first-quarter (ended Dec. 31, 2018) operating income by $40 million — its eighth consecutive quarter of improvement — due the theatrical performance of Bumblebee and Instant Family, a key profit driver was television content production.

Television revenue in the quarter ballooned 84% year-over-year driven by the release of Netflix’s “The Haunting of Hill House,” “Berlin Station,” on Epix, the recent greenlight for a third season of “Tom Clancy’s Jack Ryan” on Amazon Prime Video, and production of Netflix series “Maniac” and “13 Reasons Why,”among others.

Studio boss Jim Gianopulos contends the agreement with Netflix and other streaming services replicates past industry practices around “movie-of-the-week” productions for broadcast TV.

“The difference, of course, is that the quality of these films is much higher, making these relationships even more valuable,” Gianopulos said last November when announcing an agreement with Netflix to produce original movies for the streaming service.

To Bob Bakish, CEO of corporate parent Viacom, Paramount’s renewed success underscores a case study driven by new management.

Speaking Feb. 26 at the Morgan Stanley technology, media & telecom confab in San Francisco, the executive’s comments coincided with the promotion of Dan Cohen to president of worldwide home entertainment & television distribution.

Cohen’s priority will be television production, a business Bakish said didn’t exist at Paramount four years ago. The unit generated $400 million in revenue in 2018 — and is expected to grow 50% to $600 million in 2019.

“It’s not about delivering shows, it’s about delivering hits,” Bakish said.