Digital Lifescapes

Ongoing disruption of the video entertainment industry is most apparent in North America, where incumbent pay-TV service providers continue to report significant subscriber declines. Past attempts to slow or reverse the customer losses have proven to be unsuccessful. Clearly, it's a huge challenge. Furthermore, relatively new rivals in the sector, such as AT&T and Verizon, have invested heavily to acquire legacy media and online advertising companies in the hope of finding a viable business model to compete with more innovative offerings from a growing list of alternative providers. Video Entertainment Market Development Meanwhile, the growth of subscription over-the-top (OTT) video services has been driving the changing trends in the pay-TV landscape. OTT video services have attracted hundreds of millions of subscribers worldwide, causing pressure on traditional pay-TV operators. This OTT growth trend is expected to continue, reaching a subscriber base of 400 million i...

Digital TV and online video has seen the battle between Over the Top (OTT) providers and traditional television networks pushed to the forefront. In order to differentiate themselves, and reduce the need to rely on expensive content partnerships, OTTs will produce more of their own entertainment content. According to the latest worldwide market study by Juniper Research, Subscription Video on Demand (SVoD) services -- from leading providers such as Netflix and Amazon -- will drive a surge in OTT revenues to reach $120 billion in 2022, and that's up from $64 billion in 2017. In this environment, the traditional expensive bundle of pay-TV services will surely continue their decline. Original Content Market Development The upside market opportunity for the innovative low-cost video entertainment providers is significant. The in-depth market research also uncovered that over a quarter of global households will eventually subscribe to SVOD services by 2022. The new research foun...

Key findings from a new video entertainment survey outline the increasing popularity of original content, and a growing trend of paying for multiple video services. According to the latest 451 Research market study, 19 percent of streaming video subscribers are paying for three or more services -- that's up 4 points over the previous year. These streaming enthusiasts are creating their own bundles of video services, starting with Netflix (95 percent) and Amazon Video (82 percent) then adding a combination of subscription and a-la-carte platforms such as Hulu, HBO Now and iTunes. Netflix and Amazon Lead the Market Among all survey respondents who pay for a streaming service, 79 percent say they subscribe to Netflix and 53 percent to Amazon Video. That said, Amazon Video continues to be the growth story, up 5 points over the past year. Access to movies (50 percent) is the top reason why consumers pay for streaming video services; viewing complete seasons of TV shows (45 perce...

Some traditional pay-TV service providers have already supported their customer's expectations for better apps on smart TVs, which enable service subscribers to overcome the limitations of their provider's set-top box and limited on-demand video programs. Moreover, the leading online video subscription services -- such as Netflix, Amazon Prime and Hulu -- enable millions of American smart TV owners to independently access video entertainment (without traditional pay-TV). Internet-Connected TV Market Development According to new research from The Diffusion Group (TDG), the penetration of Internet-connected TVs among U.S. broadband households has increased nearly 50 percent since 2013 -- from 50 percent market penetration to 74 percent at the end of 2016. Connected-TV market penetration grew by 22 percent between 2013 and 2014, and another 15 percent between 2014 and 2015. However, new growth has slowed to only 4 percent, indicating that the market has matured, which is...

Blame Netflix, but they're not alone. Subscription Video on Demand (SVOD) services continue to disrupt the traditional video entertainment sector in major markets worldwide. In addition, North America has been a proving ground for innovative new offerings. According to the findings from a recent study, North America will have 112 million SVOD subscribers -- that's for movie and TV services only; excluding sports -- by end-2016, which is up by 19 million when compared with 2015. Moreover, the SVOD total is forecast to climb to 138 million by 2021. However, the North America study by Digital TV Research anticipates 117 million TV households in the market by 2021, so the SVOD total will represent 104 percent of all TV households in the region. SVOD Market Development Trends "It is important to stress that these SVOD figures are gross – some homes take more than one SVOD platform, especially in the U.S. market," said Simon Murray, principal analyst at Digital TV R...

Video entertainment demand has been evolving rapidly. Yet traditional pay-TV service providers are still challenged to address the needs of more progressive consumers. Case in point: subscriber awareness of their "TV Everywhere" offerings -- the ability to watch programming from their pay-TV provider on devices other than a TV -- remains low at 36 percent, which is unchanged since 2013. Meanwhile, pay-TV marketers are attempting to capitalize on another growing trend. Skinny bundles, TV subscription packages composed of selected channels targeting specific customer segments, have the potential to attract elusive younger consumers to pay-TV, according to the latest market study by Altman Vilandrie & Company. However, their survey also finds that two-thirds of older consumers, typically the most loyal subscribers of legacy pay-TV, say they are wasting money for channels they don’t use -- so, skinny bundles could cannibalize the service provider's existing subscriber...

Several television broadcasters and pay-TV providers have attempted to match over-the-top (OTT) video by offering their own online services. Most notable is the move by HBO to offer a subscription service to their TV shows via HBO Now. Revenues from subscription video on demand (SVOD) services, such as Netflix and Amazon, are set to more than double from $14.6 billion this year, to $34.6 billion in 2021. Netflix will now grow its U.S. subscriber base to be similar in size with leading traditional pay-TV service providers. Ongoing SVOD Market Development According to the latest market study by Juniper Research, SVOD providers will see substantial returns on their expansion and growth strategies, as more countries and markets move to this method of video consumption. And, as more consumers adopt the move away from the old linear, scheduled TV model. While SVOD continues to draw customers away from traditional pay-TV providers, legacy networks are now seeking to diversify and a...

The world now contains 8.1 billion connected smartphones, media tablets, personal computers, televisions, TV-attached devices and various audio devices. On average, across the whole globe, this Internet-connected device installed base now equates to about four devices per household. "The proliferation of media-enabled connected endpoints has implications for media consumption, media production, broadband infrastructure, and the business itself of network management and traffic discrimination," said Merrick Kingston, principal analyst at IHS . Smartphones have already contributed about half a billion new devices to the market each year. Media tablet adoption has also grown rapidly. But that overall growth is not spread evenly. Case in point: by the end of 2020, the forecast smartphone-to-tablet ratio will rise to nearly 10:1, according to the latest worldwide market study by IHS. Gains for Mainstream Market Development The IHS study also noted the big changes in the...

Mobile network service providers in the United States are making adjustments to their offerings, to better accommodate the growing customer demand for streaming video. Meanwhile, many savvy smartphone users now reduce their cellular data service costs by connecting to Wi-Fi networks. Eighty-one percent of all American smartphone users now stream video on their devices, according to the latest market study by The NPD Group. The trend gained new momentum during the course of 2015. Video Usage Demographic Segmentation This smartphone use-case is being driven primarily by device users who are 25 and younger, who spend twice as much time watching video content on YouTube and Netflix mobile apps, when compared to users who are over the age of 25. As a result of this uptick in video consumption, smartphone users who are 25 and younger outperform older age groups in terms of cellular and Wi-Fi data consumption levels generated by video applications. These users consume, on average, 6...

Video entertainment in the typical American home has changed dramatically during the last few years. Streaming subscription video content to a TV set is now commonplace. There are several market drivers that are apparent, as a result of the consumer transition to over-the-top (OTT) video. The incumbent service providers had initially ignored the trend. Pay-TV providers had hoped that the baby-boomers would continue to tolerate perpetual price increases. Television broadcasters assumed that millennials would simply learn to accept the twenty minutes of commercial advertising that interrupts every hour of TV entertainment. In hindsight, both of these scenarios actually helped to fuel the introduction, market development and ongoing adoption of alternative -- often much lower-cost and more appealing -- video entertainment offerings. "Ownership of connected televisions and streaming media players is accelerating while the availability of streaming content is simultaneously expan...

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 w...

The American video entertainment realm has continued to evolve during 2015. Market development in the traditional pay-TV sector has been particularly difficult. However, there are still some significant upside opportunities. Baby Boomers comprise nearly a third of U.S. adult broadband users and are significantly more likely than other segments to subscribe to traditional pay-TV services. According to the latest TDG Research study and data-driven analysis of this vital but oft-overlooked consumer segment, this makes them excellent candidates for the high-revenue sales of operator value-added services. As TDG first noted earlier this year, the race-to-the-bottom that currently defines pay-TV operator strategy -- that is, the targeting of Millennials with low-cost bundles -- has deflects marketing resources away from efforts to grow ARPU among other subscribers. "Unlike Millennials, Broadband Boomers are quite loyal to their current operators and have very deep pockets,"...

As the video entertainment market evolves in America, the traditional pay-TV service providers are seeking to maintain their subscriber base in the face of rising operational costs related to content, which often directly translates into higher service fees for their customers. Meanwhile, short-term promotional discounts are still being applied to attract potential new customers to the traditional pay-TV offerings. But it's becoming increasing difficult to compete with the value-based pricing of the over-the-top (OTT) streaming video services (Netflix, Hulu, etc.) . According to the latest market study by Leichtman Research Group (LRG), 83 percent of all U.S. households nationwide subscribe to some form of pay-TV service. That being said, the percentage of households that subscribe to a pay-TV service is down from 87 percent in 2010. "Changes in the dynamics of the pay-TV industry are not driven just by those exiting the category, but also those coming into the category,...

Digital entertainment now encompasses the inclusive aspect of services found on many smartphones, media tablets and connected TV sets. According to the latest market study by Juniper Research , the mobile and online entertainment industry will reach revenues in excess of $300 billion annually by 2019 -- that's up from $195 billion this year. The research observed that growth in the market would be driven by increased adoption of online television and video entertainment services, with the industry accounting for more than 60 percent of the net increase in market value over the next 5 years. The new study also found that Over-the-Top (OTT) video service providers -- such as Netflix and Hulu -- offer an attractive combination of third-party and home-grown content, with a subscription-based model that is supplanting the legacy on-demand pay-per-view approach. The research also found that while video game revenue will capture the lion's share of the digital entertainment m...

Following the launch of the Netflix and Hulu video streaming services in America, most savvy industry analysts knew that while it wasn't clear how long it would take for these offerings to gain momentum, one thing was blatantly obvious -- the disruption of the legacy pay-TV model had begun. Fast-forward to today, North America already had 50.6 million subscription video on demand (SVOD) homes -- for movie and TV services only, excluding sports -- by end-2014. That SVOD adoption translates to 38.8 percent of all TV households and 48.1 percent of fixed broadband homes, according to the latest market study by Digital TV Research . They have assessed that this market penetration represents considerable growth since 2010, when there were just 16.7 million SVOD homes -- that was about 13% of all TV households. Therefore, it has been said that the North American region is the world's most mature for SVOD services. However, the disruption in the North American video entertainme...

Over the Top (OTT) television and video entertainment revenues in Latin America -- across thirteen countries in the region -- are forecast to reach $2.91 billion by 2020, that's up from the $1.13 billion expected in 2015. From the $2.13 billion in revenues to be added between 2014 and 2020, it's estimated that Brazil will contribute $938 million and Mexico $437 million, according to the latest market study by Digital TV Research. "Subscription video on demand (SVOD) will remain the region’s largest OTT revenue source," said Simon Murray, principal analyst at Digital TV Research . This emerging SVOD market is forecast to contribute $1.75 billion by 2020 -- Murray says that's up from next to nothing in 2010. Pan-regional video services -- such as Netflix, Clarovideo and Movistar -- are now reported to be making an impact and are adding a competitive edge to the SVOD sector in Latin America. According to their latest assessment, Digital TV Research estim...

The North American video entertainment distribution industry is a perfect example of where disruption was desperately needed to unseat the incumbent providers who had become complacent. First, it was the video rental stores, then the legacy pay-TV service providers. The only question that most savvy consumers asked was "why did it take so long for someone to offer a substitute to pay-TV?" The introduction of over-the-top (OTT) video offerings, such as Netflix, was a much-needed alternative to the high-cost traditional pay-TV service that's most known for its programming re-runs and perpetual interruptions from advertising. Slow Pace of Pay-TV Disruption The consumer rebellion to abandon pay-TV is becoming a worldwide, but slow moving, phenomena. Parks Associates latest market study found that global OTT video service subscription revenues will increase from nearly $9 billion in 2014 to over $19 billion in 2019. Currently, 57 percent of U.S. broadband households su...

The growing popularity of watching online entertainment has meant that viewing video via the public internet has become a much more widespread activity in many people's lives, particularly the younger demographic that demonstrates little interest in the traditional pay-TV experience. Worldwide subscribers to all over-the-top (OTT) video entertainment services -- such as Netflix and Amazon Prime -- will increase from 92.1 million in 2014 to 332.2 million by 2019, according the the latest market study by Juniper Research . Continued growth within the North American market will see it remain as the leading region, in terms of total subscribers, but closely followed by the Far East, as this region emerges with new services and rapidly growing consumer interest. In its latest global market assessment, Juniper found that consumers will still favor Connected TVs as their primary screen -- especially for watching long-form video delivered via OTT subscription services. Their resear...

The growing popularity of watching online video entertainment has become a more common activity worldwide, particularly with the younger generation. As a result, these shifting video consumption trends have created a few market share gainers and many losers. According to the latest market study by Juniper Research , subscriptions from Over-the-Top (OTT) video entertainment providers -- such as Netflix and Amazon Prime -- will generate $31.6 billion by 2019, that's up from just under $8 billion in 2014. Continued growth in the established markets of West Europe and North America, along with the emergence of key OTT players in the Far East and Asia-Pacific, will bring a surge in the adoption of OTT subscriptions over the next four years. Assessing the Threat to Legacy Pay-TV Juniper observed that OTT services are seeing a rapid uptake by all people who want to view content, when and where it suits them. Mobile devices, such as notebook PCs and media tablets, are responsibl...

​Traditional pay-TV service providers in the developed markets have been reacting to ongoing customer churn. Overall growth is now forecast at only 3.7 percent CAGR through 2020, according to the latest market study by ABI Research. In contrast, over-the-top (OTT) video services continue their strong growth, and should experience 26 percent total revenue growth in 2015 -- with a 24 percent CAGR through 2019. With the growing popularity of independent OTT services, such as Netflix and HBO Go, customers are starting to demand a similar experience from their pay-TV subscriptions -- including features such as content search, recommendations and mobile device support. Informed consumers will no longer accept legacy television offerings, as is. The bar of expectations has been raised by the OTT service providers that dared to re-imagine the video entertainment experience. "Comparatively high priced pay-TV bundles are losing customers to more inexpensive, IP-delivered content,...