Consumers in hte US spend over $6 per month on Netflix, Hulu Plus, and other subscription OTT video, according to Parks Associates.
The average monthly spending on internet-based SVOD services among US broadband households increased from $3.71 per month in 2012 to $6.19 per month in 2015, according to the research form’s new report Content Strategies: Survival in the New Video World.
“Multiple content players have held onto traditional content windowing strategies for years, but OTT technologies and emerging business models have finally forced these companies to experiment with new windowing strategies,” said Glenn Hower, research analyst, Parks Associates.
“New models for movies include day-and-date availability, as with the movie Beasts of No Nation, where it was released for streaming the same day as in the theater. For streaming TV shows like Jessica Jones or Transparent, viewers can watch full seasons all at once, satisfying binge-happy viewers. Consumers have quickly adopted these new habits as part of their OTT monthly subscriptions.”
A typical price point for a subscription service is $7-$10, but several niche services are available for under $5, according to Hower. U. broadband households on average spend less than $1 per month buying and less than $1 per month renting digital video, indicating they purchase less than one digital video a year and rent between one and four videos per year.
“The subscription model clearly dominates in the US, which could create a disconnect in value propositions between consumers and content providers, who might seek out revenues from more lucrative transactional services over low-margin SVOD services,” Hower said.
“Currently they are exploiting multiple digital distribution outlets to monetize current and library TV content, including authenticated catch-up players, third-party aggregators, and direct-to-consumer subscription services. There are also bidding wars for premium library TV content, with Netflix paying a reported $118 million for Friends and Hulu paying a reported $160 million for Seinfeld.”