Demand for OTT, SVOD an opportunity not threat for pay-TV
DetailsJoseph O'Halloran | 06 February 2015
The demise of traditional television viewership and multichannel services through over-the-top (OTT) subscription video-on-demand (SVOD) services, maybe somewhat exaggerated says a Horowitz Research report.
amazonThe analyst surveyed more than 2,000 multiplatform viewers — defined as watching at least an hour of TV content a day and spending more than a fifth of their viewing time streaming — and noted that as more traditional content providers move toward offering standalone, the era of à la carte may have finally arrived. Yet it also stressed that these changes in the industry represent growth and opportunities for all players and that even though multiplatform viewers are very keen on the idea of SVOD, the vast majority are not ready to cut the cord on ease of access to broadcast and premium content.
Horowitz's survey found that multiplatform viewers represent a third (31%) of all TV content-viewing households in the United States and pinpointed these viewers' behaviour as key to understanding the recent and developing OTT changes in the media world.
Just over a fifth (22%) of multiplatform viewers reported are likely to change their relationship with their content services, with a similar percentage of those who have multichannel services saying they are likely to cord-cut. A quarter of multiplatform viewers who do not currently have or have never had multichannel service said they are likely to start subscribing to a multichannel service.
Perhaps one of the most stand-out stats was that the overwhelming majority of multiplatform viewers who have both a multichannel service and OTT SVOD services are not ready to give up easy access to broadcast programming, even when presented with the option of adding standalone, à la carte SVOD services like the new services offered by HBO, Showtime and CBS. Among multiplatform viewers who have multichannel service, three-quarters rates access to broadcast networks as a top advantage of having a multichannel service, and two-thirds (66%) said that broadcast prime time dramas and/or comedies are essential. Conversely, among multiplatform viewers who do not have a multichannel service, 38% rate not having access to broadcast networks as a top disadvantage of being OTT-only, and half say that broadcast prime time dramas and/or comedies are essential.
Interestingly, the survey also showed that HBO, Showtime and CBS have potential as standalone OTT services: overall, 14% of multiplatform viewers would create and choose a package without a multichannel service that includes at least one of these three new services. Among those who do not currently subscribe to a multichannel service, 12% would add at least one of these three new services and remain cord-cutters. Among the 39% of multichannel subscribers who would create and choose a package without a multichannel service, 41% would add at least one of these three new services.
"Current SVOD providers, including Hulu, Netflix, and Amazon Prime, have transformed the landscape by providing the kind of on-demand user experience that traditional distributors have not yet fully delivered," explained president of Horowitz Research, Howard Horowitz. "These services are so good that it has led some — not most — to consider cord-cutting and relying on SVOD alone ... The demand for easy and total access to 'live' broadcast and premium cable content remains strong for the overwhelming majority of multichannel subscribers, including those who are currently enjoying the major OTT and SVOD services. That said, there is strong potential for standalone HBO, Showtime, CBS and other services among those who choose to cut the cord."