SVOD subs up, premium TV subs down

January 21, 2014 08.29 Europe/London By Broadband TV News Correspondent

SVOD makes up 67% of all digital video transactions in the US, and it continues to grow faster than all other types of digital-video acquisition.

According to The NPD Group subscriptions to HBO, Showtime, and other premium TV channels have declined over the past two years, as Netflix and other subscription video-on-demand (SVOD) services have gained in popularity.

There was a 6% overall decline in US households subscribing to premium TV channels over the past two years, while households subscribing to SVOD grew 4%.

Share of US Households Subscribing to SVOD and Premium TV Services

According to NPDs The State of SVOD report, 32% of US households were subscribed to premium-TV channels in August of 2013, compared to 27% of US households that subscribed to SVOD services. Netflix remains the clear leader in SVOD; however, Hulu Plus and Amazon Prime are reaping the biggest growth benefits in the category, as consumers tack on secondary SVOD services.

As SVOD services have gained momentum, its clear that some consumers are trimming their premium-TV subscriptions, said Russ Crupnick, SVP of industry analysis for The NPD Group.

As SVOD increasingly strives to become a channel itself, viewers might consider it to be an adequate substitution for other premium channels, or perhaps they are switching to economize on their time and money spent.

Overall digital-video transactions rose 3 share points since 2012, reaching 70% of all home-video transactions in 2013. (NPD counts home-video transactions as purchases and individual paid rentals, not including free on-demand movies and TV shows included with a pay TV subscription.) In 2013 SVOD made up 71% of all digital-video transactions, and it continued to grow faster than all other digital acquisition types.