Skip to main content

Analysis of Average Monthly Spending on SVOD Services

Video entertainment viewing in the typical American household has evolved. Gone are the days where broadcast television gained the lion's share of consumer attention. Meanwhile, legacy pay-TV services have struggled to keep pace with shifting customer preferences and numerous alternative lower-cost offerings.

Average monthly spending on subscription video-on-demand (SVOD) services among U.S. broadband households increased from $3.71 per month in 2012 to $6.19 per month in 2015, according to the latest market study by Parks Associates.

Parks examined new business models emerging from the increasing consumption of over-the-top (OTT) content in the American video entertainment market -- including new experiments in content windowing.

How the OTT Trend Disrupted the Market

"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 at Parks Associates.

Their analysts believe that 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 the Netflix Studios series 'Jessica Jones' or the Amazon Studios series 'Transparent', viewers can watch full seasons all at once, satisfying people's desire to free themselves from traditional linear broadcast TV constraints.


According to the Parks assessment, consumers have quickly adopted these new viewing habits as part of their OTT monthly subscriptions.

Broadband Household Spending on Video 

A typical price point for a subscription service is $7-$10, but several niche services are available for under $5, according to Hower.

U.S. 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 U.S., 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 concluded.

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 the 'Friends' TV series and Hulu paying a reported $160 million for the 'Seinfeld' series.

Popular posts from this blog

Digital Transformation Spending Reaches $1.8 Trillion

Ongoing investment in business technology will remain on track, despite concerns about the global economic outlook which continues to evolve in 2022. Enterprise CIOs and CTOs are focused on operational profitability and digital business growth goals that are enabled by strategic IT initiatives. Global spending on the Digital Transformation (DX) of business practices, products, and organizations is forecast to reach $1.8 trillion in 2022 -- that's an increase of 17.6 percent over 2021, according to the latest market study by International Data Corporation (IDC). Many anticipated DX investments will sustain this pace of growth throughout the 2021-2025 forecast period, with a five-year compound annual growth rate (CAGR) of 16.6 percent. Digital Transformation Global Market Development "IDC expects to see aggressive DX technology investment growth in 2022 following a minor slowdown during the pandemic period," said Craig Simpson, senior research manager at IDC . "As orga

Flexible Working: Why Company Culture Matters

The main reasons for the Great Resignation are obsolete leadership, fearful middle managers, and a toxic culture that hinders employee engagement. Perhaps that's why some organizations are still struggling with the consideration and development of a flexible working model.  They're incapable of evolving to a more enlightened approach to work where employees are treated with respect. They're stuck in a bygone era of the 20th-century industrial revolution where 'shareholder value' tops all other values, and where spreadsheets and financial data analysis drives all key decision making. We should not be surprised that 76 percent of human resource (HR) leaders now feel that hybrid work challenges an employee's connection to organizational culture, according to a recent survey by Gartner. A 2022 poll of HR leaders reveals the most challenging aspect of setting their hybrid strategy is adjusting the current organizational culture to support a hybrid workforce. In fact,

Energy Sector IoT Cybersecurity Gains Momentum

The electric distribution industry continues to invest in digital transformation projects. Advanced Metering Infrastructure (AMI) technology is becoming a driver for connected electricity meters, which will reach an installed base of 1.3 billion by 2027. AMI growth is prompting utilities and energy suppliers to revisit their IT infrastructure security and device management operations, according to the latest worldwide market study by ABI Research. Energy Infrastructure Security Market Development Digitization of traditional electricity grids and the modernization of the aging energy infrastructure is among the top concerns for utility operators and governments worldwide. Security for last-mile energy consumption applications was frequently overlooked. "However, the introduction of AMI, smart metering, and grid digitization is steadily increasing spending for secure management services, assisting implementers to transition to IT (information technologies) and OT (operational techno