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Findings from Futuresource Consulting suggest that the relationship between SVoD and pay-TV is relatively complementary in most countries, with pay-TV households more likely to take SVoD services than free-to-air only households, although as SVoD becomes more established, this is less apparent.
The eleventh edition of the firm’s twice yearly consumer research programme – Living with Digital – reports on the shifts in consumers’ entertainment content consumption, service usage and device ownership and interaction. In the latest survey, 2,000 interviews were conducted in each of the UK and US and 1,500 in Germany and France. China, Japan, South Korea, Canada, Australia, Italy and Spain will also be covered in the next wave of research.
The survey provides detailed analysis on the trends in SVoD, as uptake continues to rise across all countries. Both Netflix and Amazon Prime Video are increasingly prominent in the US, UK and Germany and multiple service uptake is also high – with 82 per cent and 69 per cent of Amazon Prime Video users in the US and UK respectively taking Netflix. Uptake of Netflix in France and Germany has increased significantly since the previous wave of research, although there is evidence that churn is high in France compared to the other surveyed countries.
According to Futuresource, there is evidence to suggest that SVoD services are starting to cannibalise pay-TV, but in France and Germany, pay-TV penetration is over twice as high amongst Netflix households than non-Netflix households.
While SVoD growth continues to impress, the shift to digital video purchasing remains relatively steady. “Despite a decline in DVD and Blu-ray purchasing, the number of consumers buying transactional digital video appears to be slowing, largely driven by a decline in digital renters. However, those purchasing Electronic Sell-Through (EST) movies and TV shows are marginally increasing,” commented David Sidebottom, Principal Analyst at Futuresource Consulting. “Few video buyers are just buying EST, suggesting a steady transition to digital ownership,” Sidebottom adds.
Increased living room connectivity continues to help drive this overall video viewing. Connected/Smart TV connectivity rates have improved since the last wave, with 85 per cent of US and UK smart TV owners now connecting their sets. Across all countries, 71 per cent of connected sets are being used once a week or more. Video continues to drive overall usage, although free viewing has fallen back as paid-for video, particularly SVoD, increases in importance on connected TVs.
Connected TV connectivity rates have grown despite the proliferation of Digital Media Adaptors (DMAs, or streaming boxes/sticks) with growth particularly notable in Europe; in Germany 16 per cent of respondents now have a DMA. Across all countries, multiple device ownership is important, 27 per cent of consumers with a DMA now have more than one. Regular usage is marginally higher than for connected TVs with 84 per cent of owners using them at least once a week.
Despite this growing choice in video viewing options, live TV remains the most frequently used platform for accessing TV/video across all countries, although after this, the second and third most frequently watched format remains diverse by country. The number two platform in France is catch-up TV, Germany is DVD/Blu-ray, UK is DVR Time-shift and UA being SVoD, suggesting strong local behavioural characteristics.