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Netflix gained 1.8 million accounts in the course of 2015 (+37 per cent) to 5.2 million, surpassing the 1.3 million VoD-enabled homes added by fixed-line telcos Sky (including Now TV), Virgin Media, BT and TalkTalk according to Enders’ analysis of the home entertainment market in the UK.
The majority of SVoD homes overlap with pay-TV accounts, and are topping up content for family members, not cord-cutting.
Amazon Prime Instant Video, bundled into Amazon Prime, looks set to balloon from 1.6 million users in Q4 2015 on the back of the marketing of Jeremy Clarkson’s new motoring show, cementing its position in home entertainment by serving a family-friendly eco-system of devices and media, leveraging its mammoth 25 per cent share of UK e-commerce.
Free-to-the-user YouTube remains the heavyweight with 35 million monthly unique users in the UK, although skewing strongly to Millennials, while those 55+ will take longer to move beyond catch-up TV to embrace a wider range of VoD options.
Enders’ anaylsis also shows that the UK residential communications market maintained strong growth of 6 per cent in Q4, helped by overlapping price increases at BT and TalkTalk, albeit mitigated by weaker volume growth as a result of the TalkTalk cyber-attack
This strong growth level benefits from multiple factors, including continually growing broadband adoption, broadband ARPU being boosted by the shift to superfast, price increases across line rental, calls and premium pay-TV, and additional pay-TV adoption at the lower end
Enders expects a modest dip in market revenue growth moving into 2016 as various one-off boosts drop out, but the underlying drivers of growth are sufficiently diversified to give confidence that further downside is limited