U.K.-Based Futuresource and Boston-Based BCC Research Firms to Merge

U.K.-based market research consultancy Futuresource Consulting and Boston-based market research firm BCC Research have announced a strategic merger.

“There are strong synergies between BCC Research and Futuresource Consulting which can now be fully realized,” Craig Ive, interim CEO and portfolio manager of the two companies, said in a statement. “The brands share complementary research offerings and together can provide our clients with a greater depth and breadth of research. Futuresource has leading technology expertise, while BCC’s strengths lie in the life sciences. These two distinct industries are increasingly interacting with and informing one another, creating opportunities for more robust and expansive research.”

The formal process of the merger began in February 2024, with a targeted completion date of April 2024, according to a release. Both companies will retain their respective brand identities while sitting collectively under a new name.

“The unification of BCC Research and Futuresource Consulting is an extremely positive step,” Ive said in a statement. “We will simplify and streamline operational efficiencies, allowing both businesses to run together seamlessly. By uniting the two brands, we are better positioned to get ahead of the rapid technological evolutions close on the horizon. Both companies can grow together with a stronger foundation.”

The merger has already secured new business projects that combine Futuresource’s consumer research with BCC’s sector expertise, according to the release.

Other key areas set to benefit from the merger, according to the release, include:

  • enhanced product and service offerings;
  • renewed commitment to client success, including a newly created Customer Success Team focused on building strong relationships with clients while providing a space to share regular feedback;
  • streamlined processes;
  • technological innovation to better leverage cutting-edge technologies such as Artificial Intelligence (AI) to drive continuous improvement; and
  • expanded reach, with the unified entity now having combined offices across the United Kingdom, the United States, and India.

 

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“With formal processes still in motion, some services may experience temporary disruption,” Ive said in a statement. “We aim to make the transition as smooth as possible to keep this to a minimum. With completion set to formalize in the coming weeks, clients can expect the full strength of our operations to be restored shortly.

“We plan to push both companies to the forefront of technological and cultural innovation, all the while providing greater value to clients. Numerous new offerings will allow clients to access research in an engaging, interactive, and highly digestible format. Details of a new virtual community form part of our ambitious growth plans.

“The two companies share 85 years of collective experience, which puts us in a very privileged position to move towards a value-based business model. We plan to implement a new advisory service to provide the depth and personalization that clients are increasingly seeking. Moreover, the creation of the new virtual community for our clients and analysts will give us a unique offering within the multi-billion-dollar market research industry.”

For more information about the newly merged company, contact Craig Ive or Olivia Lowden at comms@futuresource-hq.com.

Futuresource Consulting Joins U.K. Home Entertainment Trade Groups

Futuresource Consulting has become the newest industry member of two U.K. home entertainment trade groups, the British Association for Screen Entertainment (BASE) and DEGI: The Digital Entertainment Group International.

London-based Futuresource, which provides a range of research reports to support business decisionmaking in the home entertainment market, joins as a hybrid member offering syndicated surveys, including Living with Digital, Kids Tech and Audio Tech Lifestyles.

“By joining BASE and DEGI, we aim to work more closely with all those across the home entertainment industry, sharing our research with the [their] membership,” James Duvall, principal analyst and head of entertainment at Futuresource, said in a statement.

Futuresource joins the 80-plus organizations currently within BASE and DEGI that helped spearhead £4.9 billion ($6.1 billion) in U.K. home entertainment consumer spending in 2023, up 10.6% from £4.43 billion ($4 billion) in 2022.

Liz Bales, CEO of BASE and DEGI said Futuresource’s data plays a crucial role in the trade group’s industry analysis of the home entertainment landscape.

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“Their membership not only strengthens and builds upon a longstanding partnership, it delivers actionable insights and drives informed decisioned making for the benefit of [our] members,” Bales said in a statement.

The upcoming DEG Roadshow, with events taking place in Paris, Stockholm and London, is slated for April 23-30.

Survey: More Than 40% of U.S. Consumers Report Buying or Renting Digital Titles Since Pandemic Hit

Consumers increasingly turned to digital video services in the second half of 2020, including transactional VOD, according to a December 2020 Futuresource survey.

The jump in digital uptake in the periodic “Living With Digital” consumer survey taken at the end of the year came after “an already impressive and partly pandemic-fueled first half,” according to Futuresource.

Transactional digital video in the second half continued to tally strong gains in user uptake. In the United States, more than 40% of consumers said they had bought or rented a title since COVID-19 hit, while in key European markets, more than 30% of consumers said the same thing. While the new wave of AVOD services is less established in Europe, more than 40% of respondents said they accessed one of the key AVOD services such as Pluto TV in the previous month.

SVOD uptake also continued to increase, driven by multiple service uptake, but also due to the continued strength of Netflix and Amazon Prime Video. Overall, Amazon Prime uptake was one of the big winners, with the pandemic boosting the appetite for “free” shipping and video streaming, whilst strong gains in the United Kingdom were boosted by the increased availability of Premier League Football.

“Disney+ has been a key driver of multiple SVOD uptake in 2020,” said David Sidebottom, principal analyst at Futuresource Consulting, in a statement. “Other services will also continue to help drive this phenomenon into 2021, with the likes of more recently launched services such as HBO Max, Paramount+ and Discovery+ key to this, especially in the USA.”

The December survey indicated a continued future appetite for new SVOD services, with 30% of SVOD subscribers saying they will take more services in 2021 than currently and only 10% saying they will take less.

“However, consumers are becoming increasingly savvy about managing their subscriptions,” Sidebottom said in a statement. “Over one quarter say they will dip-in-and-out of services, more so in 2021 than currently, highlighting once more the importance of churn management for services in an increasingly cluttered landscape. This increasingly fragmented SVOD landscape is also mirrored across overall video viewing trends.”

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Interestingly, viewers said they are also branching out to other forms of video viewing than SVOD and AVOD, including disc. The survey saw respondents in many countries report an increasing proportion of their viewing share on typically less dominant viewing categories at the end of 2020 compared to June 2020. Viewing digital transactional video, social media video, broadcast VOD and even watching DVDs and Blu-rays, marginally increased their share within the period, although they remain comparatively small against traditional TV and SVOD viewing share in all countries, according to Futuresource.

Futuresource: Can Multiple SVOD Services Replace Pay-TV?

As consumers worldwide increasingly move toward over-the-top video distribution, new data from Futuresource Consulting finds that linear pay-TV still dominated consumer spending at 58% ($100 million) of the global home entertainment market in 2020. The London-based firm said overall spending reached $172 billion, which included pay-TV, SVOD, TVOD, electronic sellthrough, DVD and Blu-ray Disc. SVOD spending reached $55 billion, with Netflix capturing about 50% of all global subscription revenue. In 2019, SVOD revenue totaled about $36 billion.

“The sector is exhibiting phenomenal growth and driving overall growth of home video spending, with key services able to cultivate a large, well-rounded content offering that appeals to many consumers,” analyst Tristan Veale told the Society of Motion Picture and Television Engineers. “Combine this with the convenience of being able to pick up where you left off, no matter what device you decide to continue watching on, and it’s inevitable that SVOD will continue to power the growth curve. By 2024, we expect over a third of home entertainment spend will be on SVOD.”

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At the same time, transactional video, which includes packaged media, continues to slow with global spend reaching $17 billion in 2020

Veale contends that the market continues to favor of VOD, including SVOD and AVOD — driven by younger viewers. The older demographics still spend the majority of their time watching linear TV. The analyst said that while multiple services can co-exist, with consumers stacking services, a deeper integration is required with distribution platforms at a metadata level, as consumers continue down the multiservice route.

Futuresource suggests pay-TV and SVOD can co-exist via partnerships and mergers as both channels embrace digital distribution. While SVOD services have developed a business model targeting on-demand consumers, the platforms are increasingly pursuing live-sports deals, especially in Europe with soccer.

“SVOD services … are experimenting with scheduling and acquiring sports rights — two key pillars of the pay-TV industry,” Veale said. “The burning question is whether younger age groups will adopt the habits of their parents and grandparents as they grow older, or will their current video behaviors remain with them as they age?”

Futuresource: Russian SVOD Market Spend to Increase 1,000% by 2024

Russia’s relatively underdeveloped SVOD market is poised for growth over the next five years — aided in part by government regulation of Netflix and growth of native-born OTT video services.

The SVOD market doubled in size last year to RUB 6.6 billion ($83.5 million), exceeding the digital transactional VOD market for the first time, according to new data from Futuresource Consulting. The London-based research firm forecasts SVOD spending in Russia to increase by 1,000% by 2024.

Despite launching the service in 2016, Netflix Russia continues to struggle gaining subscribers in an unresponsive market. Separate data from Comparitech found Russia didn’t rank among Netflix’s 25 largest markets through June 3o — a glaring statistic considering Costa Rica, the last country on the ranking, had just 264,000 Netflix subs.

Futuresource says Netflix is impeded in part by government legislation limiting the service to 100,000 viewers per day. As a result, homegrown OTT video players are taking command of the streaming landscape, leveraging enormous financial investment and ramping up the competitiveness of the sector. Kinopoisk HD, IVI and Okko are the frontrunners, all of them implementing a range of three different OTT business models, including SVOD, TVOD and ad-supported VOD.

“AVOD has a far more important role to play in Russia than in other territories,” analyst Tara Patel said in a statement. “Leading services such as IVI achieve around half their revenue through advertising.”

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Patel said AVOD acts as a steppingstone of sorts in OTT video, with users being upsold to SVOD. That’s in stark contrast to most other markets, where consumers supplement SVOD viewing with AVOD.

Digital sales of movies is also a prominent feature on the Russian video landscape. According to Futuresource, TVOD accounts for 74% of the home video market, compared to just 30% in the United Kingdom. This is due to a combination of ownership culture, rising affluence of the middle classes, a negligible physical market and a tightening of piracy control. Popularity of digital sales comes despite DVD and Blu-ray Disc never achieving a significant foothold in Russia because of piracy.

Among the top Russian OTT video services is Kinopoisk HD, developed by Yandex, Russia’s multi-billion-dollar search engine. Known as the “Google of Russia,” Yandex also employs an Amazon-like business model, with an e-commerce division and the option to subscribe to a Yandex+ service, which provides users with free shipping and access to KinoPoisk HD, as well as discounts for Yandex Taxis, a partnership with Uber.

“Yandex is built on robust financial foundations, allowing it to invest heavily in its Kinopoisk HD service,” Patel said.

The analyst said Kinopoisk HD was originally an online service providing information about movies and TV  shows. It was acquired by Yandex in 2013, with a 2015 redesign offering access to free ad-supported content via third-party services. The platform now provides paid-for content on a subscription or transactional basis.

“Like its rivals, Kinopoisk HD has been making significant investments in local productions, which are more appealing in Russia than American shows,” Patel said. “Investment in Kinopoisk HD not only captures new subscribers but is also used to prevent churn from Yandex+.”

In terms of consumer spend, IVI is Russia’s largest SVOD service, accounting for almost 50% of all SVOD revenue in the country, according to Futuresource. Backed by one of Russia’s largest commercial banks, Alfa Bank, the SVOD service has been operational since 2010 and began as an AVOD service before diversifying into subscription and transactional offerings. IVI has been successful in transitioning its customers onto paid subscription services, though it still makes most of its content available on AVOD. IVI is also strong on its transactional offerings, hosting “IVI weekends,” where it offers cheap video rentals.

Finally, Okko is the third largest SVOD service in Russia and the leading electronic sellthrough service, which was the company’s original focus. Okko built its reputation with a premium transactional service before beginning to invest in SVOD. Sberbank, a major state-owned bank, acquired a 46.5% stake in Okko’s holding company and has recently announced preparations for additional investment. As well as providing a significant cash injection, Sberbank is preparing Okko for accelerated growth, aiming to make the multimedia service the largest OTT platform in Russia as soon as in 2021.

Futuresource: Consumers Embracing SVOD Catalogs, Transactional VOD as Pandemic Continues

As the coronavirus pandemic continues, resulting in disruptions to traditional entertainment distribution such as movie theaters, subscription video-on-demand has solidified its position as a clear consumer favorite in the entertainment landscape, according to new data from Futuresource Consulting.

Based on surveys with more than 20,000 respondents across the U.S., Canada, U.K., Germany, France, Italy, Spain, Sweden, Australia and Japan, London-based Futuresource found a marked increase in transactional digital video-on-demand purchases of movies as well.

“There’s no doubt that recently launched services like Disney+ have boosted both SVOD usage and uptake,” principal analyst David Sidebottom said in a statement. “However, it is the growth of sector stalwarts Netflix and Amazon Prime Video which are driving the overall reach of SVOD.”

The report suggests a 3% to 4% increase SVOD viewing as a proportion of total video consumption in 2020 compared to 2019. In the U.S., SVOD now accounts for over one in every four viewing hours — largely driven by those under 45 years of age. In addition to SVOD, many European markets have also witnessed an increase in free live TV consumption, accentuating its continued importance, particularly during times of uncertainty.

That said, Netflix, Prime Video and Disney+ continue to be the trendsetters, with the latter helping drive new levels of OTT video service stacking.

“Our research shows that over 90% of Disney+ subscribers are existing Netflix users, adding a new layer of growth to the SVOD environment,” Sidebottom said.

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Meanwhile, purchases and rental of digital movies and TV shows continues to see increased traction. In the U.S., almost 33% of respondents had bought or rented a digital movie or TV show from mid-March through July. The results show that VOD rentals are back in focus, with three quarters of respondents renting a digital movie.

Notably, Futuresource found that upwards of 20% of respondents buying or renting digital movies and TV shows were new consumers, in addition to those revisiting transactional VOD for the first time in a while.

“This re-emphasizes how much consumer behavior has changed due to prevailing market conditions, helping to broaden the reach of these categories,” Sidebottom wrote.

Indeed, with few new releases in movie theaters or on home video, consumers are embracing library titles. Month-on-month catalog sales continue to advance, and more than 80% of digital movie rental transactions involved a title that was more than six months old. Survey results suggest that catalog digital movie sales and rentals were typically driven by emotive impulses, such as wanting to watch an old-time favorite or a feel-good movie, either to provide escapism or just for pure nostalgia.

“The industry must now turn to strategies that keep consumers engaged across both SVOD and transactional digital video,” Sidebottom said. “From here on into 2021, it’s all about maintaining the momentum that has been born from lockdown and social distancing measures.”

Ampere: Pay-TV Added 3.1 Million Subs Globally in Q2

The pay-TV market may be in decline — especially in the United States — but globally, the industry saw an addition of 3.1 million subscribers in the second quarter (ended June 30), according to new data from Ampere Analysis.

The London-based research firm said that despite the loss of live sports due to the coronavirus pandemic — a major draw for pay-TV — emerging markets have seen subscriber gains, spearheaded by China adding 3.1 million subs, and offset by a loss of 1.1 million subs in the rest of the world.

The data is based on a “bellwether” of the top 70 reporting pay-TV operators, which represent more than half of the world’s 1.1 billion pay-TV subscribers.

The U.S. continued to be the loss leader, with 1.4 million subs decline in the quarter across bellwether companies — despite sub upticks from Charter and Dish Network. Other loss leaders included Australia, with Foxtel being hit particularly hard by the lack of sports in Q2; and Denmark, which has been suffering ongoing pay-TV losses since Q4 2016.

“While some countries are seeing pay-TV subscriptions suffer due to the pandemic, there is still growth in the market, driven partly by bundling of services,” senior analyst Toby Holleran said in a statement. “Cord-cutters in a number of developed territories like Canada — whose pay-TV market continues to mirror its North American neighbor — are being replaced by newer TV customers in emerging markets, leaving the market as a whole stable.”

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Holleran contends there is some sub growth left in developed nations such as France and Spain, which he said are bucking the trend of “stagnation” in Western territories.

Futuresource: Video Games Entering ‘Netflix’ Moment

With the pending arrival of new-generation video game consoles from Sony PlayStation and Microsoft Xbox, the transition toward online gaming, including subscription-based platforms, is heating up.

New data from Futuresource Consulting said worldwide consumer spending on game software, hardware and accessories reached $194 billion in 2019 — excluding another $17 billion spent on in-game ads, video streaming sites and e-sports.

Specifically, London-based Futuresource contends gamers will increasingly switch to subscription-based platforms such as Fortnite, PlayStation Plus, Google Stadia, GeForce Now and Xbox Live Gold and Game Pass.

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“Gaming may be on the verge of having its Netflix moment,” analyst Morris Garrard said in a statement. “We’re seeing it transition from one-shot content sales into all-you-can-eat subscription-based content access.”

Garrard said widespread adoption and consumer spend on subscription-based games will drive platform adoption.

“As these platforms gain more extensive content catalogs, consumer traction will increase, accelerating the transition towards all-you-can-eat gaming subscription services,” he said.

Software, which includes packaged media and digital game titles, remains the “golden child” of gaming, generating $143 billion in revenue in 2019, or 74% of total gaming spend across software, hardware and accessories, according to Futuresource.

As increases in connectivity and on-device storage have facilitated a move to digital content, software monetization strategies have evolved accordingly.

“Games publishers have adopted innovative ways to profit from content, from the sale of downloadable content, to in-game sponsored advertising [i.e. Wordscapes] and wider entertainment opportunities such as in-game concerts and e-sports,” Garrard said. “All of these additional revenue streams are helping extend the lifecycle and increase the profitability of a title beyond the initial purchase.”

Futuresource: COVID-19 Had Positive Impact on Gaming

New data from Futuresource Consulting found by the end of this year, the gaming software market will be worth $154 billion, and gaming hardware will end the year at $15 billion, with 51 million consoles shipped.

Much of that growth will be digital as next-generation game consoles will offer an all-digital version, devoid of a disc drive, spurring further digitalization of gaming content access. Indeed, Microsoft just revealed that the Xbox Series S will cost $299, and $499 for the Xbox Series X when they bow on Nov. 10 in the United States.

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In the meantime, Nintendo is expected to have a strong year due to less competition from Sony and Microsoft in the first three fiscal quarters, as gamers await the PS5 and Xbox Series X.

“There has been a strong response to the title Animal Crossing: New Horizons, and its timely launch at the beginning of the pandemic,” analyst James Manning Smith wrote in a post. “The title has found success through its appeal across demographics, appealing to young gamers and families, as well as the franchise’s nostalgic older fanbase, offering the perfect escape from a difficult year.”

Futuresource said that beyond next-generation consoles, mobile gaming has remained the fastest growing segment of gaming software spending, largely due to rapid growth in emerging regions. This year, mobile gaming will account for 50% of total gaming software spend, driven by the coronavirus pandemic and social distancing. It is forecast to increase its market share to 52% by 2024 due to its popularity and accessibility in emerging markets.

Futuresource: Disney, Netflix, Amazon Added More Than 6 Million SVOD Subs in U.K. Through June

With European adoption of subscription streaming video driving subscriber growth among American platforms such as Disney+, Netflix and Amazon Prime Video, new data from Futuresource Consulting suggests the aforementioned services have added more than six million combined subs in the United Kingdom through June 30 — including four million alone for Disney+.

“Disney’s timing was impeccable with Disney+ launching on the first day [March 24] of full lockdown,” analyst David Sidebottom said in a statement. “Our forecasts indicate that the service will account for a significant proportion of the growth in the U.K. SVOD sector in 2020.”

Despite the sub growth, 2020 continues to be a volatile year for the British video and TV entertainment industry, with a lockdown boom that has played to the strengths of content hungry consumers, offset by challenges around consumer retention in the second half of the year, particularly for those reliant on monthly subscriptions, as the U.K. begins to open for business again.

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London-based Futuresource projects 2021 will see a 10% increase in video/TV entertainment consumer spending, topping £10 billion total spend on video for the first time driven by increased consumer choice and continued investment in the industry.

“A strong slate will help the box office recover and in turn provide a major boost to the home video sector,” Sidebottom said.

Beyond content delivery, the U.K. continues to make its mark as a global content production powerhouse. Major investments in studio facilities planned in and rolling out from 2020 to 2023 will further enhance the region’s reputation and feed digital services with a growing range of quality content.

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Futuresource forecasts the overall video and TV entertainment sector will reach £11.3 billion in consumer spend in 2024. This will help drive total sector revenue and U.K. exports, which can be reinvested into the industry.

“The polarization of fortunes in 2020 means overall video and entertainment revenues are set to fall this year, but there is massive potential waiting around the corner,” Sidebottom said.