A new report released from Parks Associates shows that 59 percent of U.S. broadband households subscribe to Netflix, Amazon, or Hulu.
The three main players have a serious stronghold, with only 6 percent of U.S. broadband households subscribing to any other OTT service without also subscribing to Amazon, Hulu, or Netflix. Parks Associates’ OTT Video Market Tracker also found that only 3 percent subscribe to one or more sports OTT video services, such as MLB.TV, NBA League Pass, or WWE Network.
This news isn’t necessarily a surprise given previous reports detailing the dominance of Netflix in particular. Leichtman Research Group in March found for the first time that the number of households with a Netflix subscription (54 percent) surpassed the number with a DVR (53 percent). That result marked a stark reversal from the firm’s 2011 findings, which showed 44 percent of TV households had a DVR while just 28 percent had Netflix.
According to a separate report from Digital TV Research recently predicted Netflix will have 128 million subscribers by 2022, an increase of 44 percent from 89 million at the end of 2016.
That being said, the three top services are not the only subscriptions consumers are interested in. Brett Sappington, senior director of Research at Parks Associates, notes many are shopping around to gain access to interesting content they can’t get through the big services.
“Interest and viewership in OTT video services have led to an increase in total subscriptions since 2015, including an increase in households subscribing to two, three, or even four or more services,” he says. “All this translates into more money being spent by consumers and more opportunity for niche content services to capture revenues.”
Certain niche services have grown strong customer bases by understanding their target segment extremely well, yet remaining distinctive from top services such as Netflix, Amazon, and Hulu, according to the Parks Associates report.
The firm notes that Crunchyroll, a streaming service for anime videos, and WWE Network are good examples of these types of niche services. Crunchyroll reported more than one million global subscribers as of February 2017, and WWE Network had 1.95 million global subscribers after WrestleMania 33 in April, Parks Associates’ OTT Video Market Tracker shows.
Crunchyroll uses forums and events to foster a user community and tailor an experience that caters to its specific audience, according to Sappington.
Subscribing and unsubscribing from OTT video services is easy, which is one of the reasons they’re attractive to customers.
“The rampant growth of subscription volumes among North American OTT video services speaks to the success of this approach.”
However, Sappington says that this can have a dark side, as high churn has followed fast consumer adoption.
Still, the increase in the number of households with more than one OTT video subscriptions suggests “adoption exceeds churn in aggregate,” Sappington comments, though retention has posed a challenge for some individual services.
