Netflix, HBO Bookend New Consumer Streaming App Study

With 22 million people in the U.S. reportedly dropping pay-TV service for over-the-top video in 2017, a new study found OTT video users quite fickle when it comes to their subscription video-on-demand experience.

In a study of five apps — Netflix, HBO Now, Amazon Prime Video, Hulu and YouTube TV — Netflix ranked the highest among 500 survey respondents, while HBO ranked the lowest, according to data from UserTesting Inc.

The Mountain View, Calif.-based research firm conducted the survey, March 1-15, asking respondents to rank the apps based on “ease-of-use,” “speed,” “credibility,” “aesthetics” and “delight.”

Not surprisingly, Netflix ranked the highest, scoring 89.5 (out of 100), followed by Hulu (86.8), Prime Video (85), YouTube TV (80.7) and HBO Now (71.8).

While most of the apps ranked close, HBO Now apparently disappointed respondents, who cited difficulty finding any recommended content, while also experiencing technical issues such as lagging, freezing and buffering.

Indeed, had it not been for a 97 score for aesthetics, HBO Now would have ranked even lower, according to the study. On the opposite end, Netflix provided the best customer experience.

Among all apps, only 29% of respondents said they watched recommended programming, with 50% of respondents saying they subscribe to at least two SVOD services to find programming.

Other notable findings include that just 11% of respondents stream video on their smartphone or portable media device. Roku, Apple TV and Amazon Kindle Firestick accounted for 45% of respondents preferred streaming media device, followed by the computer (37%).

“The rapid, widespread adoption of streaming entertainment has created a cultural shift in which 74% of participants in this study reported watching streaming media every day,” Janelle Estes, VP of strategic research services at UserTesting, said in a statement. “While data collection can help inform some features, there’s no substitute for capturing human insights to understand the evolving needs of consumers in the ‘what I want, when I want it’ era.”

 

 

Research: OTT Sub Households to Far Outstrip TV Sub Households in 2020

U.S. OTT subscriber households will far surpass TV subscriber households in 2020, according to new data from Convergence Research.

In five years at the current run-rate Netflix will have in the United States as many subscribers as all the the traditional TV access providers combined, according the Convergence’s Brahm Eiley. Amazon Prime at the current run rate will surpass the traditional U.S. TV access providers in terms of subscribers in three years.

However, the average revenue per unit (ARPU) for U.S. TV subscribers in 2020 will still be four times U.S. OTT subscriber households’ ARPU, down from 6 times in 2017.

Convergence has just released its annual 2018 Couch Potato Reports, “The Battle for the American Couch Potato: OTT, TV, Online” and “The Battle for the American Couch Potato: Bundling, TV, Internet, Telephone, Wireless.”

Convergence estimates that U.S. OTT access revenue (based on 55 OTT providers led by Netflix) grew 41% to $11.9 billion in 2017, forecasts $16.6 billion for 2018 and $27.6 billion for 2020.

The firm estimates 2017 U.S. cable, satellite and telco TV access (not including OTT) revenue grew 1% to $107.6 billion ($94.30 per month ARPU) in 2017, forecasts $107.4 billion ($97.90 per month ARPU) for 2018, and $106.9 billion for 2020.

In 2017, the United States saw a decline of 3.66 million TV subscribers and in 2016 a decline of 2.2 million. Convergence forecasts a decline of 3.72 million TV subs for 2018.

The firm reports that 2010 saw the start of the rise in cord cutter/never households, and as of the end of 2017 estimates 32.13 million U.S. households (or 26.1% of households) did not have a traditional TV subscription with a cable, satellite or telco TV access provider, up from 27.56 million (22.6% of households) at the end of 2016. Convergence forecasts 36.76 million (29.6% of households) will be cord cutter/never households by the end of 2018.

Meanwhile, 2017 saw U.S. residential broadband subs surpass U.S. TV subs, growing to 96.95 million. Convergence estimates 2.33 million U.S. residential broadband subs were added in 2017 (2.66 million in 2016) and revenue grew 7% to $56.8 million; the firm forecasts 2.57 million additions and 6% growth to $60.5 billion for 2018.

“The gloves are off,” commentary in the report reads. “The TV-movie Industry is being reconstructed from the inside and by the outside, as programmers now directly compete against their traditional TV access and independent OTT buyers that rival them in terms of content spend. Amazon, Apple, DAZN, Facebook, Google and Netflix all have the money muscle to finance their own productions or outbid on programming including major sporting franchises.”

Because the OTT services are acting more like studios and vying for top content, traditional content owners may fight back, the commentary reads.

“We expect especially for the U.S. market going forward fewer content deals between programmers and independent OTT providers: 2017 saw Disney choose not to renew with Netflix and embrace OTT, HBO not renew with Amazon in the U.S., Hulu (which is spending more on content on a per U.S. subscriber basis than Amazon or Netflix) continue to bolster its offerings, compete more directly against TV access providers, and A+E, AMC, Discovery, Scripps, and Viacom back supply Philo,” the firm commented. “The traditional TV ecosystem does not show decline ‘yet’ except for TV subscribers. TV access players continue to raise prices (ARPU is growing but we forecast TV access revenue decline going forward), and programmers have kept up increases in programming fees and advertising rates, but this architecture cannot last in the long run.”

Hulu Adds HBO for $4.99

Hulu has quietly begun offering access to HBO Now at $4.99 monthly for a limited time. HBO’s over-the-top video service normally costs $14.99 monthly. The special rate is valid for six months, after which normal subscriber rates apply.

Hulu, which is co-owned by Walt Disney, 21st Century Fox, Comcast and Time Warner (parent of HBO), began offering HBO (in addition to Showtime and Cinemax) last summer for the normal fee.

HBO Now is also available to Hulu’s online TV service.

Earlier this week, Hulu partnered with music streaming service Spotify offering a combined subscription for $12.99 monthly – down almost 28% from the normal $17.99 fee.

 

HBO Go[es] Where HBO Now Can’t

HBO Go, the premium channel’s venerable TV Everywhere app, enables (often indifferent) subscribers in the United States on-demand access to current and catalog programs – including Hollywood movies – across myriad devices.

But three years ago, citing cord-cutting, sluggish TV Everywhere adoption industrywide, and eager to join the over-the-top video bandwagon, HBO launched HBO Now enabling domestic-only consumers without a pay-TV subscription access to all programing for a $15 monthly fee.

HBO Go, in the meantime, has prospered abroad – as a standalone SVOD service.

The app just launched in Poland, one of 17 countries HBO affords SVOD access to programing, including original content. The HBO channel is also available – like in the U.S. – through third-party pay-TV networks.

“The HBO service is already a great success across our territories within Europe. With this further expansion, we are making it even easier for series and film lovers to become HBO subscribers,” Hervé Payan, CEO HBO Europe, said in a statement.

HBO operates three regional OTT platforms in Europe, including HBO España, HBO Nordic (Sweden, Denmark, Norway and Finland), and HBO Go in 12 Central Europe.

The services include original series, movies and documentaries, local productions, third-party content, in addition to Hollywood movies and children’s programing.

“We believe new subscribers will be very satisfied with our unique offerings. We will also continue to increase our investment in local programming across all territories in Europe,” Payan said.

 

 

Report: HBO Has More Than 5M Online Streaming Subs

HBO has more than 5 million online streaming subscribers, up from 2 million a year ago, Reuters reported citing a source familiar with the situation.

Subscribers come from all the outlets it works with, including its own HBO Now, as well as  Amazon Channels, AT&T’s DirectTV Now and Sony Vue, Reuters reported.

An HBO Now subscription is $14.99 a month.

Consumer SVOD Mobile App Spending Rose 77% in 2017

Consumer spending on the top 10 mobile apps for subscription video-on-demand services via the App Store and Google Play rose 77% in 2017 to about $781 million compared to 2016, according to new data from Sensor Tower. Revenue grew almost 88% just in the fourth quarter to $242 million.

As expected, Netflix topped all SVOD apps, generating $290 million in revenue in 2017, up 113% from 2016. Notably, apps from YouTube, Starz and CBS All Access grew even more at 154%, 147% and 128%, respectively.

The data underscores the brand strength of Netflix generating revenue from alternative sources. The SVOD pioneer generated total 2017 revenue of $11.67 billion, including $3.28 billion in Q4.

The report suggests programing plays a big part in app use. HBO Now saw revenue peak to $67.3 million in Q3 when season seven of “Game of Thrones” aired. Revenue declined 21% in Q4 to $53.2 million.

CBS touted Star Trek reboot “Star Trek: Discovery” as a revenue driver. And it didn’t disappoint. Spending increased 105% in Q3 to $4.1 million compared to $2 million in the previous-year period. Revenue grew 33% to $5.4 million into Q4.