How much of a threat to traditional pay-TV are Over The Top services such as Netflix? A recent study carried out on behalf of Credit Suisse found that 37% of Netflix subscribers aged 25 to 34 substitute Netflix for pay-TV.
The survey, held among 250 Netflix subscribers, also found that about 30% of users aged between 18 and 24 are using Netflix’s streaming service instead of cable or satellite, reported CNBC USA.
“Netflix’s low cost, subscription streaming service (with improving content) is our biggest worry and could become ‘good enough’ for consumers with moderate income and TV usage to use as a substitute for pay-TV,” said Credit Suisse’s Spencer Wang in a major report on the entertainment industry.
Interesting figures, but it is our take that the relative success of services such as Netflix do not signal the end of traditional pay -TV via cable or satellite. Not yet – there is a danger that viewers might find such OTT services a good alternative for their premium movie channels. But the road for newcomers to the market is still paved with lots of hurdles, such as buying proprietary boxes to connect your TV set to the internet.
However, the research can serve as a warning for traditional operators to quickly start offering new services that their consumers seem to want. One trend has already been started by premium movie channels by adding an S-VOD service to their offer. In Belgium, Telenet offers the movies of its Prime premium channel also on-demand, and the same goes for Chellomedia’s Film1 in The Netherlands.
This gives subscribers the opportunity to request the movie they want to see at the time that suits them best rather than wait for the linear channel to show the picture.