Commentary

Just One OTT Sub Becoming Two For Consumers, Research Says

Research from Parks Associates says 31% of broadband households in this country now have multiple OTT subscriptions and that means almost half of households with at least one pay OTT service actually have two or more.

But probably two.

Brett Sappington, senior director of research calls this “the service-stacking phenomenon” which Parks, logically, thinks will propel the OTT market. Well, of course. This report, part of a larger stack of scholarship Parks is presenting today at CES, points out that the most popular stack is the Netflix and Amazon Prime combo--12% of broadband users have that.

On average, OTT users spend $7.95 a month on subscription OTT services, which Glenn Hower, the senior analyst points, is pretty much what the cheapest Netflix or Hulu subscription will set you back.

But let’s face it. Netflix basically sets the price for OTT and other players in the business must determine their month sub cost on determining how favorably its potential subscribers will compare it to Netflix. Indeed, people love it.

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A survey question in 2015 determined that nearly a quarter of 2,500 respondents to a iModerate survey actually believe that Netflix eventually will replace all of its competition. That’s some kind of consumer loyalty.

You can buy an Amazon Prime subscription on a month-to-month basis for $8.99, an offer Amazon that only gets you the video service, not the Prime free delivery service. It’s that delivery feature that lured $99 a year subscriber to Amazon’s OTT in the first place--they came for the delivery and to them the video service was the add-on.

U.S. moviegoers spend $9.32 a month, on average, to enjoy the luxury of their local Cinema 86. Altogether, consumers spend $29 a month on “video-related entertainment” beside pay TV.

But the fact that now consumers are getting comfortable with having two OTT services, it seems a consumer stop sign is gliding away. If two, then why not three or more?

The actual answer to that is that every OTT service added weakens the foundation for pay Tv. That’s why the addition of video content packages coming soon from YouTube and Hulu may really reshape viewing this year on all screens.

pj@mediapost.com

 
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