Continued cord-cutting sees mobile video streaming apps surge

DetailsJoseph O'Halloran | 16 July 2015

Research from mobile app intelligence platform provider App Annie has revealed the clear extent to which over-the-top (OTT) services are making continued in-roads into pay-TV.

The App Annie Index: Market Q2 2015 report highlights mobile application adoption in a number of vertical industries and use cases showing that overall that Google Play has extended its edge in downloads to 85% thanks mainly to low cost Android smartphone ownership increasing in emerging markets such as Brazil while iOS is the clear revenue leader.

Yet the report states boldly that the biggest story in the quarter was the strong performance of video streaming apps. Growth in the sector led to the entertainment category moving up to No 4 by worldwide iOS revenue. The report showed that in the US streaming apps like HBO Now and OTT service Hulu led revenue growth in the US as both apps made it into App Annie's Worldwide Apps Index for May 2015. The analyst noted that with HBO NOW set to hit Android devices in July and the recent launch of Showtime's streaming service on iOS, Apple TV and Roku, cord-cutting on a mass-market scale could soon be a reality.

China also saw, said App Annie, 'explosive' revenue growth headlined by Youku, iQIYI and Tencent Video. These offer a broad range of content, including YouTube-like user-submitted videos, regional and international movies, popular regional TV shows like The Voice of China, hit international series like Game of Thrones and original programming. App Annie noted that the apps providers have also secured broadcasting rights for live sports from popular international leagues like the NBA.

Indeed the analyst conceded that it had under-calculated the Chinese market, observing that due to the scale of their content libraries and strong historical downloads and usage metrics, it had expected the revenue performance of Chinese video streaming apps to accelerate in 2015 but by nowhere as much as what was the case which it described as 'staggering'. App Annie noted that that iQIYI recently announced that its paid streaming service hit five million subscribers, an increase of 765% over the previous year, while during its fiscal Q4 results announcement, Youku's daily video views passed the 900 million mark and consumer revenues from subscription and pay-per-view grew 649% year-on-year.

App Annie believes that the Chinese market still has 'tremendous' room for further growth and that Alibaba's upcoming subscription-based streaming service, Tmall Box Office (TBO), could expand the market even further. More worryingly for pay-TV providers, it predicted that China's video streaming apps certainly seem to be in position to catalyse cord-cutting and with smartphones and tablets quickly becoming the primary consumption devices for younger demographics, they could even spawn an entire generation of those cutting the cord.