Coronavirus Quarantines Expected to Up Global SVOD Subs 5% In 2020

With an increasingly captive audience due to quarantine efforts worldwide to halt the spread of the coronavirus, new data from Strategy Analytics contends the forecast for global streaming video subscriptions will increase by 5% in 2020.

The London-based research firm now projects 949 million paid subscriptions globally by the end of 2020, an increase of 47 million from earlier forecasts.

Longer term, the forecast predicts that paid SVOD subscriptions will grow by 621 million between 2019 and 2025, reaching 1.43 billion. Currently, China and the United States combined account for nearly two-thirds (65%) of paid SVOD subscriptions globally, however, as these markets mature and approach market saturation and paid subscriptions, particularly in Southeast Asia grow, their share of global SVOD subscriptions will fall to 55% in 2025.

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“One significant factor affecting future SVOD growth is the impact of the coronavirus in both the short and long term,” Michael Goodman, director of TV & Media Strategies, said in a statement. “In the near term the coronavirus will actually boost SVOD subscriptions, as well as viewing of these services, as an ever growing number of consumers adopt social distancing or are forced into quarantine.”

Goodman said long-term effects of the virus on SVOD depend on the length of the pandemic and resulting economic damage. As businesses shut down and individuals are laid off consumers will alter how they spend money on essential and non-essential services.

Strategy Analytics said China would remain the largest SVOD market with 438 million paid subs in 2025, up from 131 million from 2019. The U.S. will follow with 342 million subs, up from 125 million from 2019.

With nearly three-quarters of U.S. TV households subscribing to one or more SVOD service the domestic SVOD market is becoming saturated, according to Goodman.

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“With U.S. SVOD households continuing to add additional services such as CBS All Access, Disney+, and the soon-to-launch HBO Max, the total number of SVOD subscriptions in the U.S. will continue to grow,” he said.

Report: U.S. Dominates Global SVOD Revenue

While SVOD services around the world continue to add subscribers, revenue continues to be largely driven by the United States — birthplace of the distribution channel created in 2007 by Netflix and Roku.

According to new data from Strategy Analytics, consumer spending in 2019 on SVOD services globally was $53.34 billion, with the U.S. generating 43% ($22.93 billion) of the revenue, followed by China (17%, $9 billion), Germany and the United Kingdom at 4% each ($2.13 billion). Overall, the top 10 countries represented 81% of consumer spending on SVOD services.

The report suggests that by 2025, SVOD consumer spend worldwide will grow to $102.86 billion, with the U.S. accounting for 44%, followed by China (15%), and Germany (5%).

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Strategy Analytics suggest reasons for U.S. domination in SVOD revolve the fact that U.S. TV households are more likely to subscribe to SVOD than those in other countries. In 2019, 74% of domestic TV households subscribed to one or more SVOD service. In comparison, the global average was 32%.

On average, U.S. SVOD households are more likely to subscriber to multiple services than their counterparts in other regions. On average, domestic households subscribed to 2.45 SVOD services in 2019, by 2025 this will grow to 3.21. In comparison, SVOD households globally subscribed to 1.54 SVOD services in 2019, by 2025 this will grow to 1.82.

“Whether it is pay-TV, video rental and sell-thru, or subscription VOD, U.S. consumers have historically shown a willingness to spend on these products and services at a far greater rate than those in the vast majority of other countries,” Michael Goodman, director, TV & media strategies, said in a statement.

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Goodman said local and regional SVOD services globally must be “realistic” about potential of SVOD revenue and not base their business models on U.S. levels of demand.

Indeed, SVOD services tend to be more expensive in the U.S. than in other countries, according to the report. Globally, the average spend per SVOD service in 2019 was $6.24, in the U.S. the average was 63% higher at $10.22 per SVOD service. Given that each SVOD household in the U.S. subscribes to multiple services, they spent an average of $22.52 per month compared to $9.26 globally.

 

Discovery Hires Ex-Google Executive as CFO, Head of Strategy, Operations and Direct-to-Consumer

Discovery is ramping up over-the-top video distribution in the United States and internationally. The parent to HGTV, Discovery Channel, Food Network, TLC, Investigation Discovery, Travel Channel, Turbo/Velocity, Animal Planet, Science Channel, as well as OWN: Oprah Winfrey Network and Eurosport, March 10 announced the appointment of Neil Chugani as CFO and head of strategy and operations, Direct-to-Consumer.

The announcement was made by Gunnar Wiedenfels, CFO, Discovery, to whom Chugani reports. In the newly created role, Chugani will work closely with Peter Faricy, CEO, global direct-to-consumer at Discovery, and his team to drive the financial strategy of Discovery’s rapidly expanding DTC team. He will be based at Discovery’s London offices.

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Neil Chugani

“Neil is a highly respected digital finance leader, whose experience and skills will help us further accelerate our strategic pivot as we make our great content and brands available to our passionate fans across all platforms around the world,” Wiedenfels said in a statement.

Chugani will be responsible for formulating and implementing the financial strategy to help Discovery’s ambitious growth objectives in the DTC space. He will work with all of Discovery’s DTC business units, both in the U.S. and International markets to create consistent strategic, financial, and operational practices.

Prior to joining Discovery, Chugani was at Google since 2015, where he was a senior director and held a number of leadership positions. Most recently, he served as CFO for the business and operations of Google and YouTube in Europe, Middle East and Africa.

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U.K. Pay-TV Operator BT Moving to Monthly Program Bundles

Taking a page from over-the-top video distribution, U.K. pay-TV operator BT is switching (beginning Feb. 21) from the traditional cable bundle to specific program packages priced on a month-to-month basis.

BT is also licensing Now TV from Comcast-owned Sky, enabling subscribers streaming access to myriad programming, including Netflix. The new range of program packages start at £10 a month ($13), increasing to £60 ($78) for the all-inclusive VIP package.

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The move comes as linear TV distributors continue to lose subscribers to lower-priced OTT video featuring programming without long-term contracts.

“Our new range of TV packs bring together the best premium services, fully loaded with a wide range of award-winning shows, the best live sports in stunning 4K and the latest must-see films — all with the flexibility to change packs every month — with quick and easy search to find what you want to watch,” Marc Allera, CEO of BT’s consumer division, said in a statement.

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Nielsen: 20% of Consumers Streaming Video

In U.S. households with over-the-top video, about 20% of residents are streaming content on a daily basis, according to new data from Nielsen.

The report, citing an online survey, found that 60% of Americans subscribe to more than one paid video streaming service. That’s important considering the influx of new OTT video services entering the market. Nielsen also found that 93% of U.S. consumers said they would either increase or keep their existing streaming services.

According to survey respondents, price is the most vital attribute for a streaming service. This puts the impetus on platforms to satisfy customers’ return on investment, while being affordable enough for the rest of their media habits.

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In fact, when asked about what made them cancel a paid video subscription service, 42% of respondents said they didn’t use it enough to justify the cost.

“The proliferation of on-demand streaming services is the most profound media disruption of the last half-century,” Peter Katsingris, SVP of Audience Insights, said in a statement. “And this disruption is driving profound, real, actionable opportunity across all facets of the industry.”

Netflix accounted for 31% of household streaming, followed by 21% for YouTube, 12% for Hulu and 8% for Amazon. Another 28% was spent viewing other streaming services.

While there are myriad attributes that make a streaming service attractive to users, content, including original and proprietary, is what ultimately gets them to sign-up, according to Nielsen.

Among the top four reasons why survey participants decided to subscribe to additional streaming services were all content-based, with the top reason being to expand the content that they had available.

About 20% of respondents said they canceled a service after watching all the content that they were interested in.

“We’ve only just entered the first chapter of the ‘streaming wars,’ but rest assured that the fight will continue,” Nielsen said. “The platforms that can adapt to the marketplace may rise to the top; should they not continue to evolve nor expand their content libraries, then consumers just might replace them.”

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MMA Fighter Conor McGregor Helps ESPN+ Generate Record 1 Million PPV Streams

Pay-per-view, boxing and mixed martial arts (MMA) have been partners practically since the beginning of television. But streaming video is still a new frontier.

During Disney’s quarterly financial results, it was disclosed that Irish MMA superstar Conor McGregor helped upstart subscription streaming service ESPN+ generate more than 1 million PPV streams for UFC 246 — a record for a live streaming event that cost $70 to watch over the Internet.

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McGregor defeated Donald Cerrone Jan. 18 in the headline event — in 40 seconds.

Disney said the fight and McGregor contributed to ESPN+ adding 1 million subscribers since the end of the company’s fiscal quarter (ended Dec. 31, 2019) to 7.6 million subs from 6.6. million. Indeed, 500,000 subs signed up just for the fight.

ESPN+, which launched in April 2018, had just 1.4 million subs in January 2019. The service, which costs $4.99 monthly, is also offered as a bundle with Disney+ and Hulu for $9.99 monthly.

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Disney+ Unveils Updated Reality TV Slate

Disney+ Feb. 3 announced it is developing a reboot of reality TV series “The Quest,” now featuring teen participants and adding more worldbuilding interactive elements. The streaming service has also greenlighted the competition series “The Maze,” National Geographic’s “Meet the Chimps,” and an untitled docuseries that follows Pixar’s SparkShorts program as they discover talented new storytellers.

“The Quest,” which originally aired on ABC for 10 episodes in 2014, features a cast of everyday teens who are transported to a fantasy world called Everealm, where they have adventures and compete to be the last “true hero” remaining.

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“These projects take people on epic adventures, immerse them in fantastical worlds and shine a light on extraordinary people and creatures, which are all important benchmarks of our Disney+ nonfiction content philosophy,” Agnes Chu, SVP of content at Disney+, said in a statement.

Filmed at a castle outside Vienna, Austria, “The Quest” is a reality competition that takes place in the fantasy world of Everealm. Teen contestants compete in an unfolding drama where they encounter mystical beings and magical encounters that rival their favorite books, games and movies. They will be embedded in a fully immersive, 360-degree world complete with seamless technology, creature design, practical effects and scripted characters who interact dynamically with them. The series is executive produced by Court Five’s Mark Ordesky (“The Lord of the Rings”) and Jane Fleming; Scout Productions’ David Collins, Michael Williams, Rob Eric (“Queer Eye”); and New Media Collective’s Bertram van Munster, Elise Doganieri and Mark Dziak (“The Amazing Race”).

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Adventure competition “The Maze” brings five teams consisting of one adult and one teen relative on a journey of mind-bending proportions. Participants will solve riddles and decipher clues that will guide them through European cities and fairytale villages. In each episode, the characters will reveal information to participants pushing them onward and closer to their final destination where all contestants will convene, but only one team will solve the Maze. It is also executive produced by van Munster, Doganieri and Dziak.

National Geographic’s “Meet the Chimps” takes viewers into one of the largest wildlife sanctuaries in the world — Chimp Haven — a 200-acre refuge tucked deep in the forested heart of Louisiana, which is home to more than 300 chimpanzees. This six-part series tracks the ups and downs of this extraordinary group of chimps that are given a second chance at life by a staff whose dedication, compassion and commitment knows no bounds.

Through a seamless blend of natural history and observational-documentary filmmaking, “Meet the Chimps” puts the chimps — the heart and soul of the series — at front and center. A real-life drama with a full emotional range, the series gives unparalleled access to everything happening at Chimp Haven, including food squabbles, alliances, romances, “bromances,” tears, tantrums, high jinx and heartbreaks. “Meet the Chimps” is produced by Blink Films (“Meet the Penguins,” Meet the Orangutans,” and “The Creative Brain”), with Justine Kershaw and Michael Welsh serving as executive producers, and Virginia Quinn as series director.

The untitled Pixar series from Supper Club (“Chef’s Table”) will follow Pixar’s inventive SparkShorts program. By offering a select group of Pixar employees the opportunity to make their own animated short film, the SparkShorts program helps discover and support the next generation of Pixar storytellers. The series will give audiences an exclusive and immersive look at the filmmakers and their films, while exploring the creative philosophy and community that makes Pixar unique. Brian McGinn, Jason Sterman and David Gelb executive produce.

 

French Online TV Service Molotov Tops Netflix With 10 Million Subs

Upstart French online TV service Molotov says it has more than 10 million subscribers since launching three years ago. The platform has quietly passed Netflix (6 million subs) and was recently selected to join the French Tech 120 index for promising start-up companies headed by the French government.

Founded by JeanDavid Blanc and Pierre Lescure, who separately started AlloCiné and Canal+, Molotov in 2019 saw a 63% increase in time spent on the platform and an 82% increase in subscriptions. Noteworthy numbers considering France has been slow to accept OTT video distribution.

Molotov begins 2020 as the over-the-top video leader in France with nearly 30,000 titles updated daily from more than 170 publishers and channels, Molotov is constantly expanding its content offer.

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The service recently inked license agreements with ViacomCBS and WarnerMedia’s Turner property, Adult Swim, information (Altice / NextRadioTV, RT France), sport ( Sport in France), and integrated ethnic channels from Africa and the Maghreb (Northwest Africa).

Molotov operates a “Gamer Zone” dedicated to video game enthusiasts, with the platform expanding in the coming weeks with the integration of local, regional and foreign channels, documentaries and related content.

Molotov also enables third-party content holders to monetize programming through software tools such as “SmartPaywall” (for publishers offering paid content) and “SmartAdServing” (intended for publishers serving advertising ).

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In a statement, the platform said “Molotov’s selection illustrates the relevance of its service and the expectations that surround it, its dimension beneficial to French society and its development prospects.”

 

AT&T Outlines How It Will Jumpstart HBO Max Subscriptions

In the rush to validate expensive forays into proprietary over-the-top video distribution, media/tech giants such as Disney and Apple have partnered with third-party vendors and/or leaned on subsidiaries to boost subscriber retention.

HBO is no different.

During AT&T’s Jan. 29 fiscal call, WarnerMedia CEO John Stankey, who is also president and COO of the telecom parent, disclosed details how company plans to support the May debut of HBO Max — the SVOD platform company executives contend is better than the competition, including Netflix.

Indeed, AT&T said it bypassed $1.2 billion in fourth-quarter ($2.8 billion in annual) revenue forgoing third-party licensing of Warner Bros. Television properties “Friends” and “The Big Bang Theory,” among other shows, in advance of the Max launch.

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AT&T is going to give Max free to existing HBO subs through DirecTV and AT&T U-verse — or about 10 million consumers. The number is significant, since that’s the tally Disney said it generated in the first 24 hours after launching Disney+, assisted in part by a promotion with Verizon affording the telecom’s data subs with a free year of service.

Apple, which reportedly already has more than 33 million Apple TV+ subs, is giving a free year of service with any new purchase of an iPhone, iPad, Mac or Apple Watch.

Meanwhile, the eight million HBO Now subs (currently paying the identical $14.99 Max fee) will be automatically eligible for a Max upgrade without cost provided they do not access the OTT service through third-party platforms such as Roku, Apple TV, Amazon Channels, Google Chromecast or Hulu, among other devices.

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AT&T will also incentivize its “highest ARPU” wireless subscribers with promotional Max offerings, in addition to foot traffic at any of the telecom’s 5,500 branded retail locations in the U.S.

“It’s a great opportunity to improve our overall churn [subscriber retention], which we’ve seen happen from giving HBO to current unlimited [wireless] customers,” Stankey said.

“With Max, we’ll offer consumers more than twice the amount of programming for the same price as HBO today,” he added.

Stankey said going forward HBO’s 34 million domestic linear subscribers should expect to see more generalized entertainment content, including unscripted reality shows, news and sports.

“It’s an important dance and choreography [with linear TV distributors] that we have to do to get right,” he said. “And we feel we’re positioned very well to make that happen.”

 

Parks: Broadcast TV Still Most-Preferred Home Entertainment Option

Who said linear television is dead?

New data from Parks Associates says most American households still consume the majority (topping 50%) of home entertainment video through broadcast television.

The report suggests that while over-the-top video is popular (especially among younger consumers), survey respondents said they spend nearly 20 hours per week on average watching linear TV, compared to nearly four hours on a mobile phone.

Consumers increased by 33% in 2019 the total amount of time spent watching video compared to 2018. The Addison, Tex.-based research group says adoption of OTT video subscription services peaked at 71% of U.S. broadband households.

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Consumers ages 18-24 watch as much video on a computer as they do on a TV set (approximately 16 hours per week).

One-half of U.S. broadband households subscribe to Netflix. Amazon Prime Video is second with a 38% adoption rate. About 20% of broadband households use the free version of streaming music service Pandora. Consumers 18-34 spend nearly five hours per week listening to podcasts.

Separately, after streaming consumers covet recorded programming from the DVR, followed by VOD and DVD/Blu-ray Disc. Pay-per-view brings up the rear.

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Senior analyst Steve Nason said understanding divergent consumer video (and music) habits is key to driving subscriber acquisitions and minimizing churn among video services.

“Different demographics show markedly different attitudes and preferences,” he said.

Indeed, Parks’ data contends Netflix rates higher among women, while premium OTT services such as Starz, Showtime and HBO Now fare better with men.

Nason said the challenge remains with the coveted 18-34-year-old demo, which is the most fickle yet represents future growth of the industry.

“Younger video consumers’ programming and platform preferences are distinct from older segments, which puts traditional pay-TV providers in a difficult position,” he said. “Changing the traditional pay-TV service model could alienate older, high-ARPU (average-revenue-per-user) customers, but not changing could doom future prospects.”