AMC Theatres Closes Select Screens in Italy; Looking to Partner With SVOD Services

As a precaution against the spread of the coronavirus (COVID-19) in Italy, AMC Theatres had shuttered 22 theaters for a week in Northern Italy starting three days ago. The company, which operates 47 theaters in the country, said the fiscal impact on the week-long closings range from $500,000 to $1 million per theater.

The Italian government has confirmed that more than 600 nationals have been infected with COVID-19 thus far.

Speaking on the Feb. 27 fiscal call, CEO Adam Aron said world’s largest theatrical chain thus far has not been impacted significantly by the virus, which has killed about 2,600 people and infected more than 87,000 — largely in China.

Follow us on Instagram

“There is an increasing view in Milan that there may be an overreaction [about the virus spread] in and around [the city],” Aron said. “AMC Entertainment does not have movie theaters in China nor in South Korea nor anywhere in Asia. AMC does not have movie theaters in Iran.”

In addition to China being the epicenter for the virus, South Korea and Iran have a reported combined 2,200 cases. Japan has more 800 reported cases.

At the same time, Aron said he is fully aware that should the virus become an issue in the United States and Europe, the impact on AMC would be significant.

“It goes without saying that we are vigilantly monitoring reports and advice from governmental authorities in the United States and throughout Europe as well as from medical experts,” he said.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

As an exhibitor, Aron said AMC has a responsibility to its workers and consumers to provide a safe environment to watch movies.

“We will be a responsible player here … looking broadly at our circuit of 1,000 theaters across 15 countries,” he said. “So far so good.”

Separately, Aron said the company’s Stubs A-List ticket subscription service has between 900,000 and 1 million paid members, representing from 15% and 20% of the chain’s total U.S. admissions. Overall A-List contributed more than $20 million of incremental operating income to AMC in 2019.

“It’s increased loyalty to AMC. It’s benefited our theaters, our studios and our premium format partners,” Aron said.

While dismissing burgeoning over-the-top video consumption by consumers, Aron said AMC is looking to work with studio-backed streaming services such as HBO Max, Disney+, Hulu and Peacock to use theatres as marketing vehicle for streaming.

Aron said the company had just hired a former 20th Century Fox executive as new SVP of strategy based in Los Angeles and tasked with forging partnerships with streaming services to create value for the benefit of all parties, “but especially to create value for us here at AMC.” The new executive will be announced on March 2.

Aron said that rather than looking at theaters as competitors, he contends SVOD players should utilize theatrical exhibition to create “tremendous value” for their content and for their shareholders.

“Studies have indicated a clear and strong positive correlation between those who stream movies and those who also like to go to theaters to enjoy movie watching in person on a big screen with powerful sound and the smell of buttered popcorn,” Aron said.

 

Netflix Pushed Canadian SVOD Spend Past $1 Billion in 2018

With Canada Netflix’s highest household penetration market, it’s no surprise consumer spending on subscription streaming video across the northern border surpassed CA$1 billion in 2018, according to new data from Futuresource Consulting. Overall spend on video entertainment in Canada remained flat at CA$11.3 billion.

By 2022, video entertainment in Canada is expected to be a CA$12 billion market, with SVOD carving out significant market share. In 2018, pay-TV accounted for 74% of the market, with SVOD and box office accounting for 9% each. However, by 2022 consumer spend on SVOD will be twice that of box office and therefore accounting for 17% of all video entertainment spend.

“SVOD spend broke through the CA$1 billion mark in 2018, up 33% with 11.3 million subscriptions,” Tristan Veale, market analyst at Futuresource Consulting, said in a statement. “This was driven by market leader Netflix, which reached 6.3 million subscribers, despite a steep price hike in 2018.”

The research firm said 58% of Canadian households have at least one over-the-top video subscription, with household penetration reaching 69% by 2022 — equal with pay-TV.

Growth was driven in part by Bell Media’s revamped Crave SVOD service which saw a nearly doubling of subs in 2018 – thanks in part to assimilation of pay-TV operator’s The Movie Network channel; in addition to Amazon Prime Video.

The rise in SVOD spend contributed to 8% drop in transactional (packaged media and digital) home entertainment revenue to CA$853 million.

Futuresource said consumers are buying more digital content digitally than renting — with EST spending projected to surpass transactional VOD and on-demand pay-TV by 2022.

Indeed, Canadians are buying more digital movies with nearly 7 million EST transactions recorded in 2018 — up 18% from 2017. Apple iTunes continues to drive EST sales in Canada, which accounted for over two thirds of spend across movies and TV content. Other services include Google Play Movies and Cinemax.

“There are an estimated 1.3 million Apple TVs in use in Canada, equivalent to 10% of households,” said Veale. “This means consumers have an easy way to watch premium content on a big screen, driving increased buying.”

Notably, Amazon has yet to commit to digital rental/sales of movies and TV shows in Canada, in addition to France, Italy and Spain.

“When it does launch, it could be a catalyst to propel these markets to the next level,” Veale said.

 

Study: U.S. SVOD Buyers Average 3.4 Services

Online video subscribers in the United States average 3.4 streaming services and pay an average of $8.53 per month per service, according to a new study.

The nScreenMedia study, “Keep My Customer — Why Consumers Subscribe To, Stay With, Cancel, and Come Back to Online Video Services,” also found that 70% of households in the United States and 40% of U.K. homes have a subscription to at least one streaming video service.

The study was commissioned by Vindicia, an Amdocs company providing business-to-consumer digital services monetization.

Subscribe HERE to our FREE daily newsletter!  

Involuntary cancellation is a problem for the industry, according to the study. These payment failures occur when a credit card problem, such as insufficient funds, results in automatic cancellation of a customer. The study revealed that more than a quarter of U.S. and a third of U.K. online video streamers have had a SVOD service canceled due to a credit card problem. And of those groups, 30% did not return to the service.

“Involuntary cancellations are a huge problem for the SVOD industry, particularly among young subscribers,” said study author Colin Dixon, founder and chief analyst at nScreenMedia, in a statement. “Young adults from 18 to 34 years old are twice as likely to have experienced involuntary cancellation in the U.K., and three times more likely in the U.S.”

“For video streaming services, the ability to acquire and retain subscribers is vital to their success,” said Anthony Goonetilleke, group president, media, network and technology, Amdocs, in a statement. “However, streaming services are losing subscribers — and millions of dollars in annual revenue — due to involuntary credit card cancellations. This kind of customer churn is largely preventable. By leveraging the right technology, video streaming providers can recover failed payment transactions and capture revenue that would otherwise be lost, enabling them to better compete in a highly competitive market.”

In terms of overall cancellations, the survey looked at how often people cancel their service and their reasons for doing so. In the United States, 38% of the survey group said they have canceled one or more services in the last year. Of that group, two-thirds said they had canceled one service only, and just one in 10 have canceled three or more services.

Netflix users are slightly less likely than average to have canceled service in the last year, according to the study, while Hulu users are slightly more likely. Amazon Prime Video users are no more or less likely than average.

The top two reasons cited for canceling a video service: people couldn’t find enough content they liked and didn’t find the service a good value for their money.

Previous customers are the best new prospects, as the study found that 33% of U.S. and 25% of U.K. cancellers have been persuaded to sign up for service again.

Discounted subscriptions are an under-exploited opportunity for service providers to win new customers. The survey revealed that a 20% discount for a three-month commitment generated the highest interest level, with 66% of U.S. and 57% of U.K. subscribers saying they were likely or extremely likely to take the offer. Three months is an important milestone, because subscribers that stay this long are much less likely to leave the service. Surprisingly, the study found that offering more than a 20% discount did not result in more interest.

The study also found that free-trial abuse is not a serious problem for online video service providers. While 49% of U.S. and 62% of U.K. online video subscribers have canceled at least one service within the free trial period, only 5% in the U.S. and 2% in the U.K. have canceled within the free-trial period four or more times in the last year.

When it comes to retaining existing subscribers, content is king. The study found that 64% of U.S. subscribers and 55% of U.K. subscribers have been with their longest-tenured service for one year or more. When asked why they stay, respondents said having plenty of interesting content to watch was the top reason. Value for money was a close second place, and ease of finding something good to watch came in third. Interesting original content was the fourth reason, while providing plenty of new shows took the fifth-place spot.

Meanwhile, Amazon’s expanding influence in the VOD market is evident. The study found that one-third of U.K. and U.S. Prime Video subscribers have purchased an add-on video service, with higher income individuals more likely to use Amazon Prime Video and to purchase an add-on. In the United States, the most popular video add-ons are premium services such as HBO, Starz, Showtime and Cinemax. CBS All Access is also very popular. In the United Kingdom, the most popular video add-ons are Eurosport Player, Discovery, ITV Hub+ and FilmBox.

To learn more about the nScreenMedia study or to download a copy, visit here.

Report: Most Netflix Subs Unlikely to Cancel Service Following Price Hike

Another day, another prognostication how Netflix’s price hikes will affect subscribers.

New data from Hub Entertainment Research finds most subs will not stop service as Netflix ups plan pricing from $1 to $2. The Portsmouth, N.H.-based research firm said any impact on subscribers would likely occur among those paying $15.99 monthly for the premium plan enabling access to Ultra HD content and up to four screens concurrently.

Indeed, 69% of survey respondents said they would keep their current plan, while 16% said they would drop to a lower-priced plan. Just 9% said they would drop the service, while 6% said they would switch to a more expensive plan.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Netflix, which no longer discloses subscriber churn, added 29 million subscribers in 2018 to end the year with 137 million.

Among basic subs, 76% said they would keep the plan, with 12% considering upgrading to more-expensive plan. Just 8% of standard and 10% of premium plan subs said they would drop Netflix.

Hub said 24% of standard subs indicated a desire to downgrade to the $8.99 basic plan, while 27% of premium subs said they plan to downgrade.

While 70% of subscribers have heard about the price hike, about 50% said they were unhappy about it.

Survey respondents ranged from 8% who said they were “angry,” 38% who said they were “annoyed,” 39% who were “accepting,” and 15% who were “positive.”

“This research shows that Reed Hastings is right when he says that consumers choose based on value, not just price,” Jon Giegengack, principal at Hub, said in a statement. “Despite the increase, the great majority of customers say they’ll keep their subscription. However, the fact that half are unhappy shows that Netflix can’t raise prices indefinitely, and that higher fees make delivering on the promise of high-quality exclusive content more important than ever.”

Among standard (51%) and premium (44%) subs, they were more likely to be “annoyed” or “angry” about the price hike than basic (37%) subs.

“In some respects, the timing of the price hike announcement couldn’t have been better for Netflix, coming on the heels of its enormous viewership success with Bird Box, the buzz about Bandersnatch,and its strong subscriber growth in Q4,” said Peter Fondulas, co-author of the study. “But in an increasingly competitive SVOD marketplace, even a $1 to $2 price increase can lead subscribers to start considering alternatives.”

Report: Global Pay-TV, SVOD Subs to Reach 1.87 Billion by 2023

Consumers continue to covet video entertainment in record numbers.

New data from Digital TV Research projects 1.877 billion combined global pay-TV, subscription streaming video subscribers by 2023 – up 505 million (37%) subs from 1.372 billion at the end of 2017. SVOD subs will more than double, but traditional pay-TV will add just 94 million subs.

“China is the brightest star by adding 171 million subscriptions during this period to take its total to 610 million,” Simon Murray, analyst at Digital TV Research, said in a statement.

Murray said China would expand pay-TV subs by 32 million to 375 million, but SVOD will skyrocket by 138 million to 235 million subs. India will add 49 million pay TV and SVOD subs to total 210 million in 2023.

In the United States, traditional pay-TV subs will fall by 10 million to 80 million. Multiple subscriptions per household will push the SVOD total from 132 million to 208 million. Combined pay-TV/SVOD subs will reach 289 million, up from 222 million at the end of 2017.

Overall, subscription revenue will increase by 11% ($25.2 billion) to $251 billion between 2017 and 2023. Traditional pay-TV revenue will drop by $18.5 billion to $183 billion. However, SVOD revenue will climb by $43.7 billion to $69 billion. SVOD’s share of the total will increase from 11% in 2017 to 27% in 2023.

The U.S. will remain the subscription revenue leader despite its total falling from $108 billion in 2017 to $105 billion in 2023. Pay-TV subscription revenue will drop by $20 billion, with SVOD additions not enough to make up the shortfall.

Digital TV Research said the figures are gross subscriptions. One household could have more than one subscription. For example, a household subscribing to pay satellite TV and Netflix would be counted as two subscriptions. Some homes pay for more than one SVOD platform.

 

Research: Global SVOD Subs to Top 777 million by 2023

To some spiritual believers, the number 777 signifies luck, good fortune, miracles, optimism and fulfilled dreams. All of which apparently is in the cards for the subscription video-on-demand market.

New data from Digital TV Research suggests global SVOD subscriptions will top 777 million (excluding free trials) by 2023, an increase of 409 million subs from the end of 2017.

China and the United States will generate more than 50% of the global SVOD subscriber count by 2023, but in addition, nine other countries will have more than 10 million SVOD subs each.

China will have the most SVOD subs – despite multiple subscriptions being commonplace in the U.S. China will have 235 million SVOD subs – up from 97 million in 2017. An impressive tally considering Netflix and Amazon Prime Video do not operate in the country.

“The U.S. will have 208 million SVOD subs; up by an impressive 76 million on 2017 despite its relative maturity,” Simon Murray, principal analyst at Digital TV Research, said in a statement. “Its share of the global market will fall from 36% in 2017 to 27% by 2023.”

By 2023, Netflix will contribute 192 million subs (25% of the 777 million subs), Amazon Prime Video 120 million (15%), China 235 million (30%). Another 230 million (30%) SVOD subs will come from third-party services.

Prime Video launched in 200 countries (except China, North Korea, Crimea and Syria) in late 2016 – like Netflix. DTV Research projects 120 million Prime Video subs by 2023 – double the 2017 total. However, 110 million of the total will be in Amazon Prime territories, and therefore will not directly pay for the video platform.

SVOD revenue will reach $69 billion by 2023; up by nearly $44 billion since 2017. The U.S. will remain the SVOD revenue leader by a considerable distance – adding $17 billion between 2017 and 2023 to take its total to $29 billion.