Published March 7th, 2019
Over the past few years, online video services in Europe have experienced rapid growth, particularly those that follow the subscription revenue model. Global players such as Netflix, Amazon and HBO went direct-to-consumer, disrupting the previous long-term relationship between subscribers and multichannel operators.
Soon after Netflix began showing signs of success in North America and Western Europe, pan-European satellite operator Sky launched its own stand-alone online video service in the UK, combining on-demand content with live streaming TV networks in 2012. Others followed, such as Canal+ with Canalplay in France and Telecom Italia with TIMVision in Italy.
Currently, five services accounted for 89 per cent of the $6 billion in consumer spending attributed to subscription online video services, according to a report published by Kagan, a media research group within S&P Global Market Intelligence.
More proof of just how dominant Netflix is in Europe comes from new data by analysts at S&P Kagan. According to new research from Kagan, Netflix accounted for 52% of all subscription VOD revenues in Europe at the end of 2018.
With 52% of all SVOD revenues in Europe, Netflix is comfortably ahead of all competitors. Amazon Video is a distant second with 21%.
In terms of active paid subscriptions, Kagan revealed that Netflix is responsible for 52 per cent of total revenue, followed by Amazon Prime Video (21 per cent), Sky (four per cent), HBO (three per cent) and Viaplay (three per cent).
Parks Associates research has found that OTT video services have transitioned back into the home's living room, with a majority (52%) of U.S. broadband households now watching online video on a TV that is connected to the internet.
Its report, 360 View: Digital Media and Connected Consumers, also found that watching TV or films at home is the most popular leisure activity among US broadband households, with 55% selecting this among their top two favourite leisure activities.
"While the total number of hours consuming videos has declined, consumers are watching more internet video on the largest screen available," said Billy Nayden, research analyst, Parks Associates. "The number of hours consumers report watching video on a TV increased for the first time since 2014, with connected devices enabling internet video services on TV and shifting consumers away from PC and mobile viewing. As OTT competition becomes a battle for the living room, the challenge for device makers and content producers is finding the correct product mix to maximise both profit and utility."
The report also found that subscriptions are the dominant business model for OTT services. As more services emerge, many stakeholders fear an impending subscription overload in US households.
"As consumers' taste for OTT experimentation wanes, they will start to resist the push to add another monthly subscription to their households," Nayden said. "Many providers are starting to lead with freemium and ad-based models, in anticipation of this pushback."
Parks Associates also found that 19% of consumers subscribe to either Netflix, Hulu, or Amazon Prime Video and another OTT service, compared to 13% in 2017; and overall, consumers watched 25.7 hours of video per week in 2018, down from 29.5 hours per week in 2016.
Source: Rapid TV News & Parks Associate
Oct 26, 2018
Ad-funded VOD (AVOD) is outpacing other paid media with spend set to double to $47 billion (€41.2bn) by 2023 worldwide, according to WARC’s latest Global Ad Trends report.
More broadly, both consumer and advertiser investment in OTT platforms is rising: globally, spend is projected to reach $129.3 billion in the next five years.
As a medium, AVOD is still young, though notable examples of Hulu, HBO Now, and Sony’s Crackle, as well as reported interest from Amazon, hint at its future power.
Compared to other paid media in WARC’s International Ad Forecast, AVoD is growing faster. The expected $23.8 billion in brand investment that AVoD will receive this year equates to a 5.2 per cent share of global adspend, but spend has increased year-on-year. As a percentage of total OTT spend (estimated by Digital TV Research at $68.7 billion this year – up 29 per cent from 2017), AVoD will account for 34.7 per cent.
“Consumers’ voracious appetite for video content anywhere, on any device, has been propelled by SVoD services such as Netflix. But it is AVoD platforms which present the opportunity for advertisers to marry rich consumer data with pinpoint targeting during engaging content,” says James McDonald, Data Editor, WARC. “This is why AT&T and Amazon are exploring moves into the AVOD sector next year, with the ultimate aim of taking the lion’s share of a market expected to be worth $47 billion by 2023.”
At the strategic level, consumers’ appetite for cross-device streaming is creating an impact. A full 81 per cent of consumers now say it is important that they can watch TV programmes whenever they want.
The wide array of publisher specs, insufficient lead time required to track down all creative assets and a lack of standardised measurement when buying cross-channel audience-based inventory are cited as major concerns by practitioners.
As a result, OTT is not currently front of mind when building media strategies; just a quarter (26 per cent) of US CMOs regard OTT as either very or extremely important to their plans. This despite evidence showing integrated campaigns are 31 per cent more effective at brand building.
Source: Report: AVOD spend to double in next 5 years
May 03, 2017
Jul 31, 2017