VOD Not Just for Catch-Up Viewing

With the advent of subscription video-on-demand, broadcast TV distributors rolled out video-on-demand options such as HBO Go enabling pay-TV subscribers to access catalog programming on-demand.

With the corporate push by ViacomCBS and Fox Corp. into ad-supported VOD — underscored by acquisitions of Pluto TV and Tubi, respectively, new data from Ampere Analysis finds American and European pay-TV operators are using ad-supported VOD (AVOD and BVOD) to deliver original programming to an increasingly digital-centric consumer.

Pluto TV earlier this year added 24 content channels for distribution in Germany, Austria and Switzerland. The platform continued its distribution strategy of original content through a deal with Verizon encompassing both mobile and pay-TV.

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Tubi has begun streaming the first two seasons of Fox singing competition show “The Masked Singer” — the No. 1 show on television in its third season. It is the highest-profile program on the AVOD platform, which also added “Gordon Ramsay’s 24 Hours to Hell and Back.” All episodes of the first two seasons are now available, while current season-three episodes are available on Tubi a week following their broadcast on Fox.

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German service Joyn, a joint venture between ProSiebenSat.1 and Discovery in the U.S., has commissioned 20 original productions since launch, with shows such as the upcoming coming-of-age thriller, “Catacombs,” targeting a younger audience. Half of its unscripted originals feature YouTubers or social media influencers, with the service developing three new “reality/documentary” shows during lockdown, according to Ampere Analysis.

The London-based research firm said 30% of France Télévisions’ upcoming shows are destined for VOD, with high-profile commissions for digital platform France.tv, including “Louis XXVIII,” a sci-fi drama set in an alternate universe in which the French Revolution never happened.

“BVoD platforms were initially designed for TV catch-up viewing, but in recent years broadcasters have been investing in technical enhancements and original content to beef up their services to attract a young demographic,” Léa Cunat, senior analyst at Ampere Analysis, said in a statement.

Cunat said that while uncertainty looms large regarding return to normal for business and advertisers in the coronavirus pandemic, Ampere’s outlook for BVOD revenue growth is positive.

“We anticipate that the shift to digital marketing will be accelerated if the behaviors consumers have adopted during lockdown persist following the reopening of economies,” he said.

Ampere: U.S. Streaming Households Up OTT Video Services 27%

As expected, the number of over-the-top video services in domestic homes increased 27% in the first quarter (ended March 31) according to new data from Ampere Analysis. The London-based research firm said U.S. streaming households subscribed to 3.3 services in the period, compared with 2.6 services in the previous-year period.

The report said domestic streaming households are paying on average $34 monthly to stream video, compared with $30 monthly in the previous-year period.

“The increase is driven primarily by the launch of Disney+ in November, with some additional growth from Apple TV+,” analyst Toby Holleran said in a statement. “The [$9.99] Disney+, Hulu and ESPN+ bundle has also proven successful; we expect around 10% to 15% of Hulu subscribers to be taking the three-service bundle.”

Holleran expects the average to increase to four households with the arrival of HBO Max and Quibi.

“With many [AT&T, HBO Now] consumers already being converted [to Max] and the 90-day free Quibi trial, the average spend per household won’t have increased much yet,” he wrote.

Separately, revenue from SVOD services is projected to top $12.7 billion in 2020, growing at an annual growth rate of 2.1% through 2024 to $13.8 billion, according to Statista. User penetration is expected to top 40.1%. The average revenue per user (ARPU) currently amounts to $98.19.

Ampere: ‘Low-Level’ Pay-TV Sub Growth Continues Despite Rampant Cord-Cutting

With U.S. pay-TV operators shedding more than 2 million subscribers in the first quarter, new data from Ampere Analysis finds that worldwide pay-TV continues to grow — albeit slowly.

In a study representing 70 pay-TV operators representing about half of the world’s 1 billion pay-TV subs, subscriber totals increased 0.3% in Q1 than in Q4 2019, indicating that despite the challenging times facing the pay-TV business, and the threats from online competition, there is still at least some low-level growth — when including China.

When removing Chinese market leaders — China Telecom, China Mobile and China Unicom — there was a net decline of 0.7% in the quarter. This is an acceleration from the 0.5% decline seen in Q4 2019, and indicative of a worsening outlook for the pay-TV market outside China.

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Of the 70 companies followed, 42% saw growth in the quarter, with positive net additions of nearly 5 million subscribers. This was partially offset by the remaining 58%, which lost a total of nearly 3 million subs. The net effect was a growth of just under 2 million pay-TV subscribers in the quarter, according to Ampere.

Again, however, China continues to have a significant role in keeping the global pay-TV market buoyant. Outside mainland China, pay-TV operators in the rest of the world lost nearly 1.7 million net subs.

In fact, the trend outside China is worsening. In the same period 2019, the same group of companies lost 1.2 million net subs.

While U.S. cable and telecoms groups such as Verizon and Comcast saw significant net declines in subscriber numbers, they have been less badly hit by cord-cutting than their satellite rivals, including DirecTV and Dish Network.

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“Of the bellwether pay TV operators we’re tracking, U.S. groups represent more than half of those firms suffering net subscriber declines,” senior analyst Toby Holleran said in a statement. “But losses aren’t evenly distributed even here — IPTV and cable firms have shown more resilience as a consequence of their ability to better bundle communications and pay TV together, insulating themselves against the worst effects of cord-cutting.”

COVID-19 Hangover: 60% of Scripted Releases at Risk of Delay

Audiences and the industry can expect disruption to the supply and release of new content for more than a year as a result of production delays caused by COVID-19, according to a new report by Ampere Analysis.

The report finds 60% of scripted releases at risk of delay and a further 5% to 10% that may be lost entirely.

“Our analysis indicates that the unscripted market will more easily weather the current pandemic thanks to the production of non-location-based, and COVID-related, content,” according to Ampere. “However, the delay of summer ‘blockbusters’ like ‘The Bachelorette’ and ‘Love Island’ will have a negative impact on even the unscripted sector. We predict the scripted sector will take a far bigger hit: even if production is able to restart in June, underlying effects of the shutdown will be felt in the scripted TV market for the remainder of 2020, and well into 2021.”

In the second half of 2020, Ampere expects that the world’s top TV commissioners will release between 5% to 10% fewer new scripted titles on a monthly basis than previously predicted. The effect will last into the first half of 2021, and potentially longer.

Over half of scripted titles which would normally have released in the second half of 2020 are at risk of delays in release schedules due to the current production hiatus. Titles scheduled for release from June to August are likely to largely be in post-production, and Ampere expects delays will be more limited for this period.

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The number of scripted TV titles at risk of delay remains high for a year, with impact particularly intense at the traditional start of the broadcast season in the autumn. At this point, between 50% and 60% of scripted titles that would normally have been released in the period are at risk of delay by Ampere’s estimates. A further 5% to 10% of scripted titles expected to have been released during the autumn months are likely be lost entirely due to the current production shutdown, Ampere predicts. The proportion of scripted releases unaffected by the shutdown only rises above 40% in March 2021.

Compared to 2019, only 51% of scripted projects ordered during March through May 2019 have been released to date. With commissioning of scripted content down by 40% in the equivalent period of 2020, Ampere predicts the current lack of commissions will impact the supply of content well into 2021.

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“There is one certainty among the current uncertainty — that the COVID-19 pandemic will change the TV production industry far beyond the end of the lockdown,” Ampere senior analyst Fred Black said in a statement. “Initially, we expect delays to cause gaps in scripted TV release schedules, which broadcasters and streaming players will have to fill with other content. However, as delayed productions begin to fill out content gaps in later months, these gaps will begin to close. But this has further ramifications. The knock-on effect of delayed releases is a likely depression of the number of new commissions for some time after the shutdown ends, as commissioners look to fill schedules with delayed projects they have already invested in before signing off new ones.”

Unscripted content is set to bounce back quicker, according to Ampere. While a number of unscripted commissions expected over Q2 and Q3 2020 will be delayed, Ampere predicts release schedules will begin to return to normal by the autumn, with the percentage of titles unaffected rising to 71% by October. The biggest misses in the unscripted space are likely to be returning summer series that cannot go into production, such as reality stalwarts ‘Love Island’ and ‘The Bachelorette.’ Unscripted commissions have actually increased in comparison to the same period last year, partly to fill schedule gaps left by delayed or cancelled scripted series. However, a large proportion of these titles have been COVID-19-specific commissions. If this content is excluded, unscripted commissions have been down 27% since the beginning of March. Unlike scripted content, commissioners can typically order enough adapted unscripted content during lockdown to cover normal numbers of new unscripted releases, as well as help cover schedule gaps from delayed or cancelled scripted content.

Commissioners are currently creating a large number of extra unscripted projects which can be used to cover gaps in the schedule left by delayed titles or the missed scripted commissions,” said Black in a statement. “This number of extra commissions will begin to wane as the shutdown ends, with audience appetite for COVID-19-specific content already showing signs of falling.”

Research: SVOD Wakes Up to Reality

Reality was the second-most commissioned genre for linear services and third-most commissioned genre for video on-demand (VOD) services, according to research from Ampere Analysis on commissions, renewals and cancellations in 2019.

Data from Ampere indicates that Netflix has ramped up production of reality content compared with previous years. While in January 2018 Netflix had four original reality TV shows available, by year-end 2019, the number had grown eightfold to 32 original reality titles, with dating show “Love Is Blind” among its top-performing shows in Q1 2020.

Other findings include:

  • The most commissioned genre in the United Kingdom and the United States in 2019 was documentary, with one-off commissions a frequent occurrence. Documentary represented 31% of all first-run series ordered in 2019.
  • The second most commissioned and renewed genre was reality — at 14% of all commissions in 2019.
  • In total, 337 reality shows were commissioned in the United Kingdom and the United States.
  • Comedy closely followed reality and was the third-most commissioned and renewed genre. Almost one quarter (23%) of shows are yet to begin series production, reflecting the longer production period required for scripted series. First-run commissions accounted for 67% of all series announced in 2019 — this means shows being ordered for a first season, including limited series.
  • Most renewals were reality (24%), with comedy (17%) and documentary (17%) following closely behind.

Linear versus VOD findings include:

  • Renewals in 2019 are skewed towards linear commissions, with linear series representing 85% of all U.K. and U.S. renewals in 2019.
  • High-profile unscripted linear renewals included 19th and 20th season order for MTV’s U.K. Reality series “Geordie Shore,” and a 17th season order for NBC’s music competition show “The Voice.”
  • In 2019, linear channels cancelled 515 shows while VOD services cancelled 151. However, this is slightly skewed by the cancellations of series with a predetermined limit on the number of episodes. Once these shows are removed from the analysis, data shows that linear channels cancelled 178 shows, while VOD services cancelled 66.
  • 65% of linear renewals were unscripted series, in comparison with just 25% of all VOD renewals, with streamers preferring to focus on higher-budget, scripted fare.
  • Reality was relatively safe from cancellation on both linear and VOD platforms — only 8% of all cancellations were reality.

“While reality has been a staple for linear TV due to lower per-hour production costs and continued popularity among consumers, VOD services have been increasingly investing in the genre,” said Ampere analyst Olivia Deane in a statement. “With Netflix already commissioning two more seasons of top performing title ‘Love is Blind,’ reality looks like it will be the next battleground for linear and VOD services.”

Ampere: Netflix Primarily Dubs Content in Germany, France and Japan

With the majority of its subscribers outside the United States, Netflix’s ongoing strategy offering global content to local markets requires extensive dubbing and/or subtitle use.

New data from Ampere Analysis suggests Netflix opts to prioritize dubbed content in Japan, France and Germany, while focusing on subtitle use in smaller markets. In most non-English speaking territories, Netflix’s catalog comprises 90% foreign-language content, making localization, either through audio dubbing or subtitles, extremely important.

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Despite the SVOD pioneer’s pledge to make at least 30% of content in markets native, locally-produced titles still represent the minority of its content portfolio in all its markets, according to Ampere. This means Netflix has to rely on subtitling and dubbing for audiences in its many territories.

Indeed, the streamer largely uses subtitles in most markets, with dubbing representing less than 30% of Netflix’s foreign content.

“For Netflix, the level of localization of foreign language titles largely depends on the markets,” analyst Tingting Li said in a statement.

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In large markets like Japan, where local content is extremely important, over 40% of titles are dubbed and nearly every show has subtitles. Netflix’s dubbing is currently focused on the four largest EU markets — France, Germany, Italy, Spain — with 60% of foreign content in these territories is dubbed.

As the languages spoken in these markets cover multiple territories, investments in expensive dubbing processes can often be spread across other markets too — including Latin America, Africa & Canada, Belgium, Austria and Switzerland, among others.

These levels seen in the largest European markets are still typically lower than local SVOD competitors such as Maxdome (now Joyn) in Germany and Mediaset Infinity in Italy — both featuring almost 100% dubbed content.

Netflix’s catalog is typically larger than it competitors and its subtitling coverage is often superior, according to Ampere.

“In English-speaking countries, Netflix’s strategy is to localize foreign titles via English subtitles, while in other key markets, such as France, Germany, Italy, Spain and Japan, the streaming giant makes certain that most foreign titles are either subtitled or dubbed — catering to local content preferences,” Li said. “For other markets, such as Russia and Turkey, which represent a smaller portion of Netflix’s subscriber base, and thus harder to justify extensive localization investments, between 13% — 28% of content is localized — but we expect this to change as market penetration grows.”

For some markets, dubbing may be unnecessary — in Scandinavia, Netflix has low levels of dubbing coverage. But this is echoed by local Nordic players such as Viaplay, which has equally low levels of dubbing — and even lower levels of subtitling, partly because audiences in the region are used to watching English-language programming.

For English-speaking markets, local language content comprises 70% of titles. The remaining 30% are mostly subtitled, as in these markets, consumers are less accustomed to watching non-local content, and many of those consumers who watch foreign content prefer subtitles. The size of opportunity for audio dubbed content is thus minimal in these markets.

For French, German, Italian and Spanish-speaking markets, Ampere says around 90% of titles are foreign language, and dubbing is much more common. This is partly due to the scale of the markets, and partly due to the ubiquity of the languages themselves.

Ampere says that outside of Japan, India, South Korea and the Nordics, any markets that rely on other languages feature far lower levels of subtitling or audio dubbing, with many titles not featuring any localization at all.

Research: Half of U.S. Families Already Subscribe to Disney+

Half of U.S. Internet users with children under 10 in their household have already subscribed to Disney+ since its launch in the United States in November 2019, according to research from Ampere Analysis.

The service has also been successful in converting those ages 18 to 24, with more than four in 10 (41%) indicating that they had access to the service. For this group, the Marvel films and “The Mandalorian” were key.

Internet households with children currently make up 55% of all Disney+ subscribers in the United States, according to Ampere. One in five Disney+ subscribers are aged 18-24.

The latest research from Q1 2020 shows that Disney+ has been successful in converting consumers in both target groups, with 42% of all U.S. respondents with children under 18 and 41% of all those aged 18-24 already taking the service.

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The analysis shows that of individuals with access to Disney+ in the household, roughly half are currently using the service on a monthly basis.

“The latest figures from our Consumer media tracker indicate a very promising start for Disney+, with success in converting its two most important target audiences,” said Minal Modha, consumer research lead at Ampere Analysis, in a statement. “It will now be key for Disney to ensure it retains these customers with a mix of new Disney+ originals and new release movie titles. Furthermore, while there is still room for growth among both the two core demographic groups, it will be imperative for Disney+ in the longer term to broaden out its content offering to appeal to a wider audience.”

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Of the 56 new titles Disney+ currently has in production, the biggest volume at 19 are documentary, followed by children and family at 15.

Ampere Analysis’ consumer tracker polls Internet users in 22 markets worldwide every six months. The U.S. sample size in Q1 2020 is 4,000 consumers.

 

Analyst: Amazon Fire TV Users Prefer Streaming Netflix

Amazon Fire TV and Roku continue to spearhead the streaming media device market in the United States and select foreign markets. New data from Ampere Analysis contends Roku has a key leadership position in both the U.S. and in Canada — although Amazon is “hot on Roku’s heels” in both countries.

While Fire TV is the leading device in many of Amazon’s retail markets and has a market share of over 40% in both Germany and Japan, it still trails Roku in the U.S. Indeed, among domestic Fire TV users, the slight majority prefer to stream Netflix than Prime Video.

Ownership of Google Chromecast is high in the Nordics and Netherlands, which lack any serious Amazon retail presence. Google has over 50% market share in Netherlands and Denmark.

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Device owners show subtle differences in the streaming services they rely on, reflecting device owner strategies, interfaces and the products they promote.

Although Netflix is still the key service for Fire TV owners in the U.S., Amazon device homes are more likely to subscribe to Prime Video and HBO Now compared to Roku device owners.

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By contrast, Roku device owners show a slight skew towards Hulu and Netflix compared to Fire TV households.

Finally, Sweden tops all countries for household streaming media device penetration at 55%. That compares to Denmark, the U.K. and U.S. at 51% household penetration.

“More than any other sector, the streaming adapter market is a competitive battleground for companies with wildly different strategic imperatives — ranging from Amazon and the support which Fire TV provides for its retail operations, Apple and its high-end device ecosystem, Google and its advertising businesses, and Roku and its mix of monetization mechanisms,” Minal Modha, consumer research lead at Ampere Analysis, said in a statement.

 

Analysts Keep Piling on Apple TV+

The late Steve Jobs infamously called streaming video (i.e. Apple TV) a “little hobby,” dismissing the medium despite the burgeoning rise of Netflix and Amazon Prime Video.

Perhaps Apple should heed Jobs’ apparent indifference.

The tech giant is now diving into the SVOD deep-end with its hordes of free cash hoping a rebranded Apple TV+ app and upwards of $6 billion in content spending will compete with upstarts such as Disney+, HBO Max, Peacock and Quibi.

While the $4.99 monthly service is free for a year if you buy any new iPhone, iPad, iPod Touch, Apple TV, or Mac computer, analysts and op-eds are tripping over themselves criticizing Apple TV+ in comparison to Disney+.

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London’s Ampere Analysis, which claims Apple TV+ has more subscribers than Disney+ and Hulu, suggests Disney+’s “Star Wars” spinoff “The Mandalorian” remains a “key driver,” with viewership dwarfing Apple’s original programs, “The Morning Show” and “See.”

“‘The Mandalorian’ maintained a higher relative interest level than ‘The Morning Show’ throughout its entire run, despite Disney+ being available in only six markets,” analyst Tingting Li wrote in a post.

Indeed, Apple TV+ launched Nov. 1, 2019, in 100 markets worldwide, yet interest in “Morning Show” and “See” dropped off after the first two weeks, according to Li.

“The Mandalorian” has the same critical rating as “Friends,” based on Ampere’s proprietary quality measure. Li says future Disney+ series will include more spin-off shows such as “Star Wars: The Clone Wars” from Lucasfilm and “WandaVision” from Marvel Studios.

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Wedbush Securities analyst Michael Pachter contends that despite a major marketing effort around Apple TV+, which included signing up Jennifer Aniston, Reese Witherspoon and Steven Spielberg for original content, the finished product thus far has been underwhelming.

“[It] only had a handful of shows at launch,” Pachter wrote in a post.

Logan Purk, analyst at Edward Jones, said the streaming service would remain a “cash drain,” due to the investments required to produce original shows.

“They are leaning towards big stars and high production values,” Purk told IndieWire.

D.A. Davison & Co. analyst Tom Forte contends that while select Apple TV+ programs are “compelling,” from an investment standpoint he doubts the content is worth the investment.

“Apple is risking brand damage by offering the service at such a low price and even giving it away for free,” Forte said.

Forbes analyst John Koetsier goes one step further. He says Apple TV+ is doomed and the sooner the Cupertino, Calif.-based company realizes that the better.

Koetsier says that after unrivaled success with iPhone, iPad, Apple Watch and Mac computers, the company is stumbling with TV+ and a sudden focus on original content.

“Apple: you are amazing at hardware. You are one of the best in the world at combining hardware, software, and services,” he wrote. “You are not a media production powerhouse.”