Four per cent of UK homes now consider Netflix to be the main way they watch TV. The emergence of Subscription Video-on-Demand (SVoD) services as primary TV platforms in the home is a recent phenomenon, and while still small, will continue to ascend in importance as a segment of the UK viewing population. Grouping Netflix, Amazon and Now TV together, a little under eight per cent of all UK homes think of one of the main SVoD services as the main TV supplier in the house. Looking within the customer base, reveals the key driver for pushing SVoD services into a TV substitution role. Almost 11% of Netflix customers think of the service as their main TV service, but it is Sky's Now TV that comes out top as a main TV substitute, with 13% of people who have the service, considering it the main source of TV in the house. Clearly, it is content access that is key, with Sky's strong studio relationships, powerful streaming channel brands (including HBO-fuelled Sky Atlantic) and optional premium sport tiers driving it to top spot in the SVoD substitution arms-race. With the recent announcement that Amazon will add optional linear channels to its UK Prime Video offer and an increasing push among all SVoD platforms towards high-quality originals, the substitution battle is well and truly on.
CBS, one of the four largest US public broadcasters, has introduced a bundle of its two subscription Video on Demand (SVoD) products – CBS All Access and Showtime, priced at either $14.99 or $18.99 (depending on whether the subscriber chooses the ads-included or ad-free version of CBS All Access). The bundle will offer a $2 discount overall compared to the price of taking both services individually. This discount is attractive for those already taking just one of the services. For instance, for the 60% of Showtime subscribers who don’t take CBS, the new bundle would allow them to add CBS All Access at an entry price starting at just $3.99 per month.
CBS All Access currently has around 1.7m subscribers, of which nearly 40% also subscribe to Showtime. Thus, with around 700,000 subscribers taking both services, the new bundling discount means that CBS could lose out on around $1.4m of revenue per month. To recoup the lost revenue, CBS would need to attract roughly 100,000 new non-CBS subscribers to the bundle.
A potential addressable market is DirecTV Now and Sling TV subscribers; These services failed to secure carriage deals with CBS, meaning that CBS’s OTT services are the only way for these subscribers to live-stream CBS channels.
Ampere's research into catalogue compositions of these services suggests that Showtime had more than 2,000 hours of content in March 2017, while CBS All Access had close to 9,000 hours, giving a bundled subscriber access to around 11,000 hours of content.
In Ampere’s Q1 2017 survey, respondents were asked to identify the reasons for choosing a specific operator for their mobile subscriptions. Unsurprisingly, by far the most popular decisive factor for selecting a provider was price, evident in 12 of the 13 markets surveyed.
Google currently makes about $7 each quarter for each monthly active user (MAU) from advertising on its sites. By the end of 2016, Facebook had more than doubled its number to nearly $5 per MAU in advertising revenue.
As Facebook continues to invest in video and its ARPUs increase further, it is conceivable that in the near future an average Facebook user will be worth more than an average TV viewer.
As content exits the premium video-on-demand window and enters the first pay window, it is typically removed from TVOD pricing (digital rental) on online stores. This blackout, as its known, can act for anywhere between one and two years, dependent on negotiations between the distributors, first window rights-holders and the stores themselves. This blog post looks at a sample of 2000 titles which underwent a blackout in the first half of 2016, taken from Ampere's Analytics Service.
The changes in the devices people use to watch video content throughout the day reflects both today's greater availability and accessibility of video content as well as the underlying cycle of life as screen-based technology increasingly substitutes other media from the moment we get out of bed to the time we lay down at night.