Kantar: 109 Million U.S. Households Have SVOD Service, Netflix’s Market Share Drops

The U.S. subscription VOD service market continues to expand with 85% of households now accessing at least one service, according to new data from Kantar. At the same time, SVOD pioneer Netflix’s domestic market share is eroding.

The proportion of U.S. households with SVOD service is up 2% from the previous-year period after two consecutive quarters of decline. This means there are now 109.4 million households with subscriptions as of December 2021.

At the same time, video streaming use is growing primarily due to free ad-supported TV (FAST), and ad-supported VOD, with FAST growing 4.9%, and AVOD use up 3.6%, and SVOD up 1.8%.

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About 9% of domestic households accessed a new streaming service in the fourth quarter of 2021, up from 8% in Q3 2021. Amazon Prime Video is the top destination for new SVOD subs for the third consecutive quarter, but its share is down 4% quarter on quarter.

The Netflix subscriber base is now below two-thirds of all U.S. subscribers, as penetration continues to decline — down slightly 0.5% in the quarter, despite the success of “Squid Game.” This represents a five-percentage-points year-on-year skid.

Indeed, stacking continues to grow among current streamers, with the average U.S. household now using 4.7 services.

With the success of “Yellowstone,” the most recommended content in Q4, Paramount+ market share of new users (now at 8% of all new streaming). Peacock, which has catalog seasons of “Yellowstone,” also benefited in the AVOD and FAST space.

Apple TV+, which saw growth due to “Ted Lasso” in Q3 and Q4 21, is now facing higher planned cancellation going into Q1. As FAST drives growth of streaming, users are expecting more from their free services, with original content and quality of shows increasingly driving sign up.

Kantar said the first quarter of 2022 can expect to see more fluctuation of subscribers as stacking continues to grow and planned cancellation rates are up across the board.

“Streamers feel they can get better quality content from FAST than before, which may have negative implications for paid streaming,” read the report. “As the U.S. passes the next wave of COVID-19, overall streaming screen time may start to decline.”

Analyst: Apple TV+ Subs Binge-View More Than Others

Since its launch a week before Disney+ in 2019, Apple’s subscription streaming platform, Apple TV+, has had its share of naysayers complaining about a lack of content and subscribers, among other issues.

That mindset got a reality check this week from London-based research giant Kantar, which contends the service, however many subscribers Apple TV+ has, they are loyal when it comes to binge-viewing content. About 78% of Apple TV+ subs watch multiple episodes in one sitting of programs such as “Ted Lasso” and “The Morning Show,” compared to the industrywide binge-viewing adoption rate of 61%.

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The data, based on responses from 20,000 U.S. consumers and 12,000 in the U.K., found that Apple TV+ subs either go all in binge-viewing — or not at all.

“In June, Apple had more heavy users of the service than Netflix, but few medium intensity users — they‘re binging, or not using it much at all,” read the report.

Apple has never disclosed subscriber numbers, despite offering the $4.99 monthly service free for 12 months to anyone who purchases an Apple device. Company officials recently admitted to an industry event that the platform had less than 20 million paid subs — compared with 103 million for Disney+ and 210 million for Netflix. Apple TV+ users (including promotional) reportedly top 40 million.

The report also found that subscriber approval of Apple TV+ content has increased — a finding that mirrors the critical acclaim afforded the aforementioned “Ted Lasso,” “The Morning Show,” and the new “The Problem With Jon Stewart” show.

Data: U.S. Q2 SVOD Growth Cools, Except For Amazon Prime Video

With Netflix set to release second-quarter financials July 20, research firm Kantar suggests the fiscal period will be a wake-up call to U.S. subscription streaming video services when it comes to domestic growth.

Citing in-house data, London-based Kantar contends that a pandemic-related home confinement restrictions end, there has been a significant drop in the number of U.S. households taking out a new SVOD subscription in the past three months — down to 3.9% in Q2 2021 from 12.9% Q2 2020.

“This is the smallest growth in new subscribers we have recorded,” Jennifer Chan, consumer insight director at Kantar, wrote in a post.

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Among U.S. streaming platforms, Amazon Prime Video regained the top spot for new subscribers for the first time since Q3 2020. Prime Video gained market penetration, up three points to 58%, and ranked No. 1 in terms of new subscribers.

Kantar said Amazon is gaining subs through owned touchpoints such as offering a free trial and consumers visiting Amazon.com. Prime Video is currently among the highest for converted free trials at 31%, beaten only by Apple TV+ at 37%. Both factors indicate that Prime Video is still benefiting from the increase in Amazon Prime subscriptions taken out during lockdown.

Discovery’s branded SVOD platform, Discovery+, moved to No. 2 in terms of new subscribers, in just its second full quarter of operation. In Q2, Discovery+ generated one in 10 new SVOD subscribers according to the report.

The growth, combined with Prime Video, contributed to Netflix installed base declining to two-thirds of all U.S. subscribers — the behemoth’s lowest homeland penetration ever as streamer juggle increased competition. Meanwhile, the proportion of U.S. households who have a video subscription has remained consistent at 74.6%, meaning there are now 95.8 million households with subscriptions, as of June 2021.

Kantar said Disney+ series “WandaVision” was the top-rated title for the second quarter in a row, with Hulu’s “The Handmaid’s Tale” No. 2 and “Mare of Easttown” on HBO Max in third place.

Amazon Upping Pressure on Netflix

As well as gaining new subscribers, Prime Video’s average stacking of subscriptions increased from 2.6 to 2.8 year-over-year, compared with the market average of 3.1 to 3.8. This means there is less competition for viewership time and indicates that subscribers are getting what they need from fewer services.

When examining the reasons for satisfaction, the reports suggests Prime Video scores higher than the total market for touchpoints such as ease of use (48% vs 44%), the amount of original content (44% vs 41%) and value for money (44% vs 41%).

Over the past year, despite new entrants to the market such as HBO Max, Discovery+ and NBCUniversal’s Peacock, Amazon’s content acquisition has remained strong. This reflects the caliber of original content such as “The Boys” and “The Marvelous Mrs. Maisel.”

Kantar made no mention of Amazon’s $8.5 billion acquisition of MGM Studios.

“As people return to bricks and mortar stores, it will be interesting to see whether Prime Video’s original content can carry them through and prevent subscribers from canceling their Prime subscription,” Chan wrote.

Finally, Netflix’s share of SVOD-enabled U.S. households is at its lowest, down to 67%, from 74% in Q2 2020, and similarly its share of new subs hit 6% this quarter, down from 13% a year ago. Although the market share outranks the competition, the saturation of SVOD services may be resulting in Netflix subs trading the service in for a newer model, according to Kantar.

Whereas Disney+, Hulu and HBO Max take the top spots for content this quarter, Netflix comes in fourth and fifth position with “The Crown” and “Lucifer.”

“This is the first time they have missed out on a top three spot for content enjoyed for at least the past five quarters,” Chan wrote.

Indeed, Netflix went from having the lowest stacked subscriptions of the main services at 2.5 last year to three, meaning that Prime Video now has a lower average. This is another indication of Amazon managing to navigate the new landscape. In addition, the most common stacks for Netflix subs are Netflix, Prime Video and Hulu.

The report found that the cost of SVOD service stacking can quickly add up and Netflix subs cited saving money as the top reason (31%) for canceling service.

Interestingly, Netflix has the highest proportion of subscribers who say that someone else pays (27.4%), compared with Disney+ (26.3%) and Hulu (23.1%), suggesting a lot of account sharing is taking place.

Perhaps media attention around Netflix clamping down on account sharing has cast the streamer in a negative light among some subscribers. This may explain why Netflix received its lowest NPS score over the last five quarters with a score of 37, according to Kantar.

Stacked Subscriptions Continue to Climb

With three-quarters of U.S. households now accessing SVOD services, growth is slowing as subs now seek content rather than standalone gateways to streaming. In addition, with the rise in ad-supported VOD platforms, price sensitive consumers now have more options to drive down subscription costs.

HBO Max is launching an ad-supported option this month. For those stacking multiple subscriptions, $9.99 for HBO’s ad-free version is more attractive to a subscriber already paying $30 to $40 a month for SVOD, than Max’s $14.99 ad-free offer.

“If the content is there and the interface is good, consumers are still satisfied with ad-supported services,” Chan wrote.

TiVo Expands Data Tracking Fields

As time-shifting video pioneer TiVo separates its product and IP licensing businesses into two companies, itannounced that its TV viewership data is being expanded to include third-party services Kantar ad occurrences, and Drawbridge’s Identity Graph and premium demographic attributes.

The Kantar ad data enables customers to know both the programming viewership as well as the advertising viewership across millions of U.S. households.

The Drawbridge Identity Graph enables customers to link viewership data with associated mobile ad identifiers, extending the reach and measurement of advertisements and marketing across pay-TV, over-the-top and digital platforms.

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“Household-level TV data is becoming more attractive as the advertising and media industries look to connect consumer touchpoints across screens, platforms, and campaigns across the TV ecosystem,” Ben Maughan, VP business development and data product management, TiVo, said in a statement.

“Marketers rely on Kantar’s industry-leading ad intelligence data to track competitive activity in their sector. By connecting with TiVo viewership data, we can give our customers a holistic view of what messages consumers are receiving,” said Vik Sharma, SVP for media and tech at Kantar.

“TV’s power as an awareness channel is clear, but it’s long been missing the component of identity,” added Jon DeGennaro, VP of enterprise partnerships at drawbridge. “There’s no reason why TV can’t be as targetable and measurable as other platforms and give marketers the ability to reach and report on viewership, engagement, and conversion across the entire cross-channel consumer journey. Bringing identity to TV does just that.”

With these integrations, TiVo solidifies its role as an innovator in the TV data landscape and continues to deliver improved viewership data products that are partner-agnostic and consistent with the transforming industry.