nScreenMedia OTT multiscreen media analysis

Online TV penetration deepens, widens

SVOD US home penetration 2014-2019

New data shows that online TV – in the form of SVOD and ad-supported services – widened and deepened its adoption in 2019. With the release of new services like Disney+, Peacock, and HBO Max, expect online TV stacking and penetration to accelerate this year.

SVOD stacking increases

SVOD stacking US UK 2015-2019The practice of subscribing to more than one SVOD service is becoming far more common in the U.S., according to new data from Ampere Analysis. The company says that 39% of U.S. respondents to its third-quarter Internet survey had three or more SVOD services, up from 33% in the previous year. Europe sees even stronger growth in stacking. 22% of European respondents said they had three or more SVOD services, up from 16% in the previous year.

Leichtman Research has documented a similar trend. The company says that the number of U.S. homes with two or more SVOD services in Q3 2019 was 51%, up from 43% in the previous year.

SVOD penetration growing more slowly

The penetration of SVOD services in the U.S. sits somewhere between 72% and 74%. Leichtman Research pegged penetration at 74% in August of 2019. HarrisX says penetration was 72% in October of 2019.

Both companies agree that penetration growth is slowing. HarrisX saw the number of homes with SVOD increase by 9% between 2018 and 2019, much more slowly than in previous years. Leichtman saw SVOD homes grow 7% between 2018 and 2019, down from 8% in the last two years and 10% before that.

Video service stacking extends beyond SVOD

Creating a custom video package is nothing new for consumers. Many have been doing it without thinking for years. Consider that, according to TiVo’s latest Video Trends Report, three-in-ten U.S. consumers watch videos from Netflix, YouTube, and Facebook. A quarter use Netflix, pay TV, and YouTube, and one-in-five watch Netflix, YouTube, and free video sources like Pluto TV and Xumo.

Favorite video bundles US consumers Q4 2019The TiVo data underlines the fact that considering only paid VOD services underrepresents the full impact of online video on consumer viewing habits. TiVo says that the average U.S. consumer uses 6.9 video services if you include online free and paid services, pay TV, over-the-air TV, and social video.

Streamers adding, not substituting SVOD services

Towards the end of last year, there were reports that consumers were very likely to cancel one SVOD service to sign up for another, like Disney+. So far, at least, they do not appear to be following through on this threat.

HarrisX data shows that nearly 20 million U.S. households used Disney+ in December and that 90% of those homes also subscribe to Netflix. What’s more, 41% of the Disney+ homes streamed content from the new service every day. However, beyond The Mandalorian, there is little new content for people to watch. For something new, they need to flip back to Netflix, which debuts around 35 new shows a week around the world.

Why it matters – expect online TV stacking, penetration growth to accelerate

There will be an acceleration in online TV adoption in all dimensions this year:

  • SVOD penetration will accelerate due to the heavy promotion by top services like Disney+ and HBO Max
  • SVOD stacking will accelerate as consumers adopt these new services without canceling existing subscriptions
  • Free ad-supported video service stacking and penetration will increase with the entry of Peacock and the continued growth in usage of other services like The Roku Channel and Pluto TV.
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