Subscriptions now count for nearly 86% of US online TV, film spend
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Editor
| 19 September 2019

Assessing the market landscape of new vMVPD services in the OTT video arena, Parks Associates has found that income from subscriptions has risen from just over half of total online video spending in 2012 to now around 86%.

This is the standout finding of the analyst’s OTT Video Market Tracker which includes an analysis of market trends and profiles of OTT video service providers in the US and Canada, including Netflix, HBO, YouTube, and Amazon as well as new services Disney+, HBO Max and Frndly TV.

Parks added that it expects these services as well as the soon to be launched Apple TV+, will drive consumers to increase spending on internet video and maximise the proportion of spending on subscriptions. The increasing number of new services will also test consumers’ tolerance for adding new accounts to their monthly expenditures.

“The new services launching over the next several months are taking different approaches as they enter a crowded OTT market,” said Brett Sappington, senior research director and principal analyst, Parks Associates commenting on the OTT Video Market Tracker. “While the US market is important for Disney, the company will ultimately measure the success of its Disney+ service on a global scale. AT&T likely sees its AT&T TV offering as the evolution of its core pay-TV business rather than as an extension of its vMVPD efforts. The Frndly TV is a niche play, targeting a specific group of consumers with a low price and family-friendly content.

“The amount of money consumers spend per month will spike, at least in the short term, as new services such as Disney+ and Apple TV+ become available. Trade-off decisions will come later. To keep consumers spending at this higher level, services will have to consistently deliver volumes of compelling content within an engaging user experience.”