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Consumers are doubling down on streaming video subscriptions, and 53% of Americans will subscribe to at least two by 2018, according to a recent report by Activate.
By 2020, that percentage will climb to 62%, with 43% opting for two subscriptions and 19% subscribing to three or more. Here are a few takeaways from the study:
- The general population is catching up to early adopters. An October survey conducted by BI Intelligence found that 54% of adults who use a paid streaming video service subscribe to at least two. BI respondents skew toward tech-savvy early adopters, while the Activate survey samples a more diverse pool, suggesting there is a two-year lag between the general population and early adopter subscriptions to multiple video services.
- Netflix is the foundation of bundles. For consumers using only one streaming service, 39% subscribed to Netflix, 20% to Amazon Instant Video and 9% opted for Hulu. Consumers place high value on Netflix as the must-have service, per the survey. Of consumers using Netflix in addition to another service, 75% used Amazon Instant Video and 84% used Hulu. Although dozens of niche video services are available today, only 3-4% of US SVOD users subscribe to a service other than Amazon, Hulu, HBO Now, or Netflix.
- Original content is becoming more important to retain users. In 2016, 45% of survey respondents said that original content was extremely or quite important for keeping a Netflix subscription, an increase of nine percentage points from 2014.
Nearly one-third of consumers in the US and Canada paid $9-$11 per month for subscription-video-on-demand (SVOD) services in Q3 2016, according to Digitalsmith and TiVo’s quarterly video trends report. This is set to increase over the next two years as more consumers opt for multiple streaming services.
Growth of subscription-video-on-demand (SVOD) services in the US has slowed considerably over the last year as competition in the online video streaming space intensifies. Heavy hitters like Netflix, Hulu, and Amazon Prime are increasingly squeezed by new competitors with exclusive content and niche video offerings.
International markets, and specifically, the Asia-Pacific (APAC) region will be paramount for both established SVOD players and new entrants looking to establish themselves in the successful video space.
The SVOD market in the APAC region is poised for explosive growth over the next five years due to increased mobile adoption, amplified broadband expansion, and enhanced purchasing power.
Dylan Mortensen, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on subscription video on-demand that explores how slowing SVOD growth in the US will lead to a surge in the APAC region.
Here are some of the key takeaways from the report:
- While SVOD services are increasingly rooted among US households, growth is beginning slow. Growth in North American SVOD subscriptions is set to fall from 30% in 2014 to 4% by 2018.
- The best opportunity for continued growth lies in the Asia-Pacific (APAC) region. The region had nearly 42 million SVOD subscribers in 2015, but could have up to 158 million by 2021.
- The increasing adoption of smartphones and mobile data is propelling growth in mobile video viewing across APAC, which is poised to outpace the rest of the world.
- Rising purchasing power in APAC underlines the opportunity for online video services. China and emerging Asian economies represent nearly two-thirds (63%) of global economic growth.
- Content creators and marketers stand to gain from SVOD’s push into the APAC region. Content creators can benefit from the surge in short-form video, while marketers can capitalize on advanced product placements.
In full, the report:
- Forecasts SVOD subscribers in the APAC region.
- Explores the factors behind SVOD’s slowing growth in the US.
- Breaks down reasons why APAC is ripe for massive online video growth.
- Discusses who will benefit from SVOD growth in APAC.
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