eMarketer: Nearly 50% of Gamers Don’t Subscribe to a Video Game Service

With online video game subscriptions reportedly a must-have service, new data from eMarketer found that 48% of survey respondents do not have a paid subscription game service.

For those gamers who do subscribe, Sony Interactive’s PlayStation Now and Microsoft’s Xbox Game Pass are the most-popular video game subscription services, used by 21% and 18% of those ages 18 and older, respectively. Google Play Pass takes third, at 14%, while Nintendo Switch Online ranks fourth, at 13%.

Notably, Switch has been the top-selling video game console for much of the past two years, according to The NPD Group. For the holiday-shopping week of Thanksgiving, which included Black Friday, Switch was the top-selling console, with nearly 550,000 systems sold. Switch has been the top-selling console for 35 out of the last 36 months, according to NPD.

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Analyst: Netflix Needs to Consider Ad-Supported Streaming

As Netflix wrestles with saturated subscription streaming markets and slowing subscriber growth worldwide, the SVOD pioneer has thus far refused to consider (along with live sports) ad-supported streaming — despite its market dominance.

New data from eMarketer finds that ad-supported video-on-demand (AVOD) viewers represent close to half of all U.S. internet users. In addition to free ad-supported streaming television mainstays The Roku Channel, Shout! Factory TV, Tubi, IMDb TV and Pluto TV, SVOD platforms Paramount+ and Hulu have incorporated advertising into their lower-cost subscription tiers.

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While linear-TV advertising still dominates the market, connected-TV ad revenue is rising. By the end of 2021, CTV ad spending is projected to increase nearly 60% to $14.4 billion.

That’s money on the table Netflix is ignoring, says Laura Martin, analyst with Needham. Martin contends the streamer should add a lower cost subscription tier with ads as an antidote to streaming fatigue and market saturation.

“Without a lower cost tier, we believe churn will rise in Netflix’s highest ARPU [average revenue per user] markets owing to the ‘digital attention recession’ as global economies continue to reopen over the next 12 months,” Martin wrote in a note.

Netflix has launched lower cost subscription tiers in select markets targeting mobile-only users. The company also bowed a free streaming service in Vietnam.

HBO Max Projected to Reach 80 Million Subs This Year

Following a sluggish start, WarnerMedia’s subscription streaming video/AVOD platform HBO Max is running on all cylinders. New estimates from eMarketer suggest the SVOD service will reach 80 million subscribers by the end of the year. That’s up from previous projection of 100 million subs by 2025.

The research firm contends that WarnerMedia’s decision to consolidate the HBO Go and HBO Now platforms into Max helped drive up subscriptions. However, with Amazon last month announcing it would drop Max from its Prime Channels platform, industry scuttlebutt suggests the streamer could lose 5 million Max subs.

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“The older streaming services HBO Go and Now have been replaced by Max, and HBO has been removed from Amazon Prime Video Channels,” analyst Ross Benes wrote in a post. “These developments allow Max to absorb viewership from various HBO domains that have either been shuttered or rebranded.”

Benes believes that with Max now available on Roku and Amazon Fire TV, a better picture has emerged regarding subscriber traction. Max’s sub additions were also bolstered by Warner Bros. Pictures releasing its new movies straight to the streaming service in 2021.

“Together, the shrinking theatrical window, clearer subscriber metrics from the company, improved distribution, and consolidated operations have helped HBO Max add viewers at a faster rate than we previously expected,” Benes wrote.

Canadian SVOD Market Projected to Reach 28 Million Subs in 2022, Driven by Netflix

Following months of home confinement due to the pandemic, the number of Canadian consumers accessing subscription VOD will top 28 million subscribers in 2022, according to new data from eMarketer. The tally had previously been projected for 2024. In 2021, there will be 1 million more digital video viewers in Canada than previously forecast.

While YouTube tops the list for overall video viewership, subscription VOD services, led by Netflix, account for most of the growth in video viewership. Domestic video services, like Crave and Club Illico, have gained committed audiences but don’t rival the numbers from international services, which include Disney+ and Amazon Prime Video.

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Netflix and other SVODs have fewer viewers than YouTube because they focus solely on entertainment. Additionally, there’s greater competition for eyeballs among these platforms. There will be 23.8 million subscription OTT viewers in Canada this year, which is up 4.1% year-over-year, and on top of a 14.9% growth rate in 2020.

“We predict that nearly two-thirds of Canadians will be subscription OTT users by 2025,” analyst Paul Briggs wrote in a blog post. “As the market grows, subscription OTT viewers will take a larger share of digital video viewership. They will account for 86.3% of digital video viewers in 2025.”

Netflix is still the most popular OTT service by far, with 18.6 million viewers, up 2.9% over last year. We expect viewership will grow at a slower rate in the coming years. By 2025, Netflix will garner viewership from half of the population in Canada.

Nordics a Growing SVOD Market, Despite Saturation

After the U.S. and Canada, Scandinavian countries account for the most-developed when it comes to consumer adoption of over-the-top video services. That said, new data from eMarketer suggests the region remains primed for growth.

In Norway, Denmark, Sweden and Finland, household penetration of streaming video services tops 78%, compared with 66% across Western Europe. That said, Finland will see the largest market increase in 2021, at 7.4% year-over-year, while Sweden and Norway will approach 6% growth, and Denmark, 5% growth.

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“We expect the Nordic subscription OTT market to become even more competitive,” Brian Lau, associate forecasting analyst, said in a statement. “Established players like Netflix and Amazon are ramping up their investment in local content. Meanwhile, newer services from the U.S. and the rest of Europe, such as Disney+, HBO Max and Sky Showtime, have recently entered the picture or are preparing to do so.”

Indeed, Netflix in April announced it would open a production hub in Sweden, while Amazon jumpstarted Prime Video service in the region with the introduction of local original content. Meanwhile, Nordic Entertainment Group has reported strong paid subscriber growth for its Viaplay streaming platform.

“As competition for viewers heats up, we expect steady growth in subscription OTT service users over the coming years,” Lau wrote. “In 2022, across all the Nordic countries we track, more than three in five Internet users will watch content on those services each month. By the end of our forecast period in 2025, this will be the case for more than two-thirds of the region’s Internet users.”

Report: TV Viewing Declining in 2021

After a surge in overall media consumption, including TV viewing, during the height of the pandemic in 2020, consumers will continue record consumption — except via the TV.

In addition to digital, media consumption includes radio, television, print and packaged media.

New data from eMarketer found that the average daily time spent with media increased to a record 13 hours and 21 minutes in 2020 — up 58 minutes from 2019. That daily average is expected to decline by 9 minutes to 13 hours and 12 minutes in 2021.

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The report found that among U.S. adults, the daily average media consumption across digital devices will increase by 9 minutes a day in 2021 — even after adding more than an hour in 2020.

The surge in digital media means that the average time spent with traditional media will continue to decline. The data shows legacy media consumption will drop 5.7% this year, which eMarketer attributes to people spending less time watching traditional TV.

Indeed, the report found the average U.S. adult will spend 18 less minutes consuming traditional media this year — 16 minutes of which will come from declines in TV viewing time. U.S. adults will also spend slightly less time than last year listening to radio and consuming print media this year as well.

“Ultimately, 2020 was an anomalous year for TV,” wrote Audrey Shomer, author of the report. “The medium picked up minutes for the first time since 2012, as people spent more time watching TV news about the pandemic, U.S. elections and social unrest.

“This year, however, TV will reverse its 2020 growth and fall below 2019 levels. We expect that time spent watching TV will continue to contract: The average U.S. adult will spend another 15 minutes less with the medium in 2022, and 11 minutes less in 2023.”

Report: Pluto TV to Surpass $1 Billion in Ad Revenue by 2022

Pluto TV, the free ad-supported TV streaming service (FAST) owned and operated by ViacomCBS, is set to increase 2021 revenue nearly 78% to $786.7 million, according to new data from eMarketer. The research firm contends the platform will surpass $1 billion in revenue by 2022 — underscoring the rise in popularity of streaming media for marketers.

Citing third-party survey research, the report suggests 42% of ad buyers will use streaming video for the first time this year, with another 56% continuing the practice — which includes online and linear TV distributors. Indeed, the report found that a majority (60%) of AVOD/FAST ad revenue will come from linear TV, followed by digital display (37%) and other sources.

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Report: Netflix Takes Most U.S. SVOD Revenue

Netflix invented the subscription streaming video market in 2008. Thirteen years later the SVOD behemoth still dominates consumer spending on streaming video in the U.S., according to new data from eMarketer.

The research firm says Netflix, Disney and YouTube are the biggest benefactors of consumer spending on over-the-top video. In 2021, just under one-third (30.8%) of all U.S. OTT subscription revenue will go to Netflix. Disney will account for about one-fourth (25.9%) of SVOD revenue, and YouTube will account for 13.2%.

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The research firm says Netflix’s share of total OTT subscription revenues is declining, which is as a result of increased competition and market size, not service quality. As reported, Netflix had a record year in 2020, adding millions of North American subs in a saturated market. E-Marketer expects Netflix’s domestic subscription revenue to increase to $11.76 billion in 2021, up from $10.64 billion in 2020.

Unlike Netflix, YouTube and Disney each operate online television platforms YouTube TV and Hulu+Live TV, respectively, which skew revenue statistics, according to analyst Ross Benes.

“Even though [online TV] subscribers remain low compared with the most popular streaming products, the high fees of [virtual MVPDs] have a big impact on these companies’ subscription revenues,” Benes wrote.

Netflix Use Further Distanced YouTube, Amazon, Hulu, Disney+ in 2020

Longtime online video champion YouTube saw usage dip behind Netflix in 2019 for the first time. The gap between the SVOD behemoth and Google-owned video platform expanded in 2020, according to new data from eMarketer. The average time spent daily on Netflix in the U.S. increased to 31 minutes, compared with 27 minutes on YouTube — up from 26 minutes and 25 minutes, respectively in 2019.

While daily use among Amazon Prime Video, Hulu and Disney+ increased as well, they all lagged significantly behind perennial leader Netflix.

Amid the pandemic, U.S. adults spent 1 hour more per day on digital activities (across all devices) than they did in 2019, according to eMarketer. Total digital time is now on track to surpass 8 hours daily by the end of 2022.

Separate data from J.D. Power found that the average U.S. home increased the number of SVOD subscriptions to four from three in early 2020 — upping monthly spending to $47 from $38 in 2019.

In 2020, U.S. adults spent 7 hours, 50 minutes (7:50) per day consuming digital media, up 15% from 6:49 in 2019, the biggest increase since 2012. It’s also considerably higher than eMarketer’s Q1 2020 projection (7:31).

Digital time accounted for 57.5% of adults’ daily media time in 2020, and that figure will reach 60.2% by 2022.

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“Connected TVs and video game consoles are the main beneficiaries of the cord-cutting trend due to increases in the number of subscription OTT and ad-free VOD users and content offerings,” forecasting analyst Zach Goldner said in a statement.

  • Social Network Time: 1:05, up from 56 minutes in 2019
  • Digital Video Time: 2:13, up from 1:46 in 2019

 

“As normalcy returns in 2021, overall digital consumption will hold all of last year’s gains,” Goldner said. “Desktop/laptop time will return to negative growth this year, but smartphone time will more than make up the difference.”

Smartphones are driving a significant portion of adults’ total digital time. In fact, smartphone time surpassed 3 hours for the first time in 2020 (3:13), up from 2:45 in 2019.

Looking ahead, growth in digital time will continue, albeit at much smaller rates. U.S. adults’ daily digital time will gain another 7 minutes in 2021 to 7:57. It will then surpass 8 hours (8:02) in 2022 for the first time.

 

Report: Global E-commerce Reached $4 Trillion in 2020

Despite a challenging 2020 for retail during the pandemic, new data from eMarketer suggests that worldwide retail e-commerce sales posted a 27.6% growth rate for the year, with sales reaching well over $4 trillion. That tally is projected to reach $5 trillion in 2022.

This represents a substantial uptick from the research firm’s mid-pandemic assessment that global e-commerce would decelerate to 16.5% growth and demonstrates the remarkable extent to which consumers have transitioned to e-commerce.

Even as total worldwide retail sales declined by 3% and recessionary conditions set in around the world, e-commerce managed to perform above pre-pandemic expectations in 2020.

eMarketer forecasts that worldwide growth in 2021 will be 14.3%, which is a relatively low number compared with 20.2% growth in 2019 and last year’s 27.6%, but it still represents $611 billion in additional e-commerce sales. Even as total worldwide retail sales declined and recessionary conditions set in around the world, e-commerce managed to perform above pre-pandemic expectations in 2020.

As recently as 2018, worldwide e-commerce sales had not yet topped $3 trillion. The report estimates that $4 trillion was easily breached in 2020, $5 trillion will be achieved by 2022, and $6 trillion will be reached by 2024. In 2020, 18% of all retail sales took place via e-commerce. In 2024, that figure will reach 21.8%.

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“We anticipate that consumers will maintain many of their newfound digital behaviors in 2021,” Ethan Cramer-Flood, analyst at Insider Intelligence, said in a statement.

Cramer-Flood contends that with so much e-commerce growth fast-tracked in 2020 — and with a full year of relatively normalized brick-and-mortar commerce — 2021’s e-commerce growth rate will decelerate to some degree, despite enduring consumer enthusiasm.