The number of SVOD customers in western Europe and North America will exceed the number of pay TV subscribers by 2021, according to Ampere Analysis.
Ampere predicts there will be 261 million subscription OTT consumers by 2021, exceeding the number of pay TV customers, which will stand at 228 million in north America and Western Europe.
Richard Broughton, partner Ampere Analysis, speaking at the Connected TV World Summit in London this morning, said that standalone pay TV is now becoming rare in Europe and North America. At the end of the last quarter, about 30% of homes are estimated to have taken pay TV only, while 13% took SVOD only and a larger number took both, he said.
Broughton said that SVOD homes took an average of 2.6 such services at the end of the first quarter of 2017, while in the US almost 90% of Hulu subscribers take Netflix, and two thirds of Hulu customers take Amazon video.
While people are now often signing up for multiple OTT TV services, people at some point run out of money to pay for TV. Broughton said Ampere had calculated that those aggregating seven main US OTT services you would be paying US$73.20 a month.
Broughton said that exclusive content is key to the appeal of successful SVOD services. He said Amazon leads the way with about 27 exclusive titles, while Netflix has about 5,000, giving people an incentive to sign up to these services.
Broughton’s presentation played against the idea that OTT TV is necessarily complementary rather than a substitute for traditional pay TV. SVOD subscribers are less likely to watch scheduled TV, and SVOD homes are 32% more likely to have churned from their main TV service in the last six months than non-SVOD homes, he said.
Making Netflix and other such services available via set-top boxes does encourage take-up, said Broughton. In the UK, Netflix is available on Virgin Media and YouView set-tops and subscribers with Netflix apps available on their box are 19% more likely to take the service than others without. Sky subscribers, who do not have Netflix on their box, are more likely to take the service than non-pay TV homes, but less likely to sign up than those with Netflix on their boxes.