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Television audiences across the world are wholeheartedly embracing online pay-TV, as the proportion of consumers with OTT subscriptions has leapt from 25 per cent to 45 per cent in just 12 months with even more planning to sign up prior to Christmas, research from subscription, billing and CRM specialist Paywizard reveals. The study also shows that 30 per cent of all consumers surveyed intend to subscribe to pay-OTT services such as Netflix, Amazon Prime Instant Video and Hulu in the run-up to Christmas this year, up from 27 per cent in 2015 – with 18 per cent planning on subscribing for the first time and 12 per cent on top of existing subscriptions.
The research into TV viewing trends during the Christmas period shows that the projected surge in OTT uptake is taking place as 59 per cent of the 6,242 consumers surveyed plan to watch more TV overall this festive season. The study, conducted by Research Now and commissioned by Paywizard for the second year running, includes results from six bellwether television markets around the globe: the US, the UK, Germany, Brazil, Australia and Singapore.
While Christmas 2016 looks strong for OTT operators, as the projected new subscriber figures (18 per cent) added to those for existing customers (45 per cent) would take the total percentage of subscribers to 63 per cent after Christmas. However, the findings also reveal that 50 per cent of those planning to take an OTT service for the first time this holiday season intend to cancel their subscription within six months.
Bhavesh Vaghela, Paywizard’s Chief Marketing Officer, comments: “There are definitely huge opportunities for OTT players to build on the momentum paid video-on-demand services are showing across all markets. Nonetheless, while OTT operators are poised for another huge lift this Christmas, it is clear that subscribers view these services as an activity they can dip in and out of. Keeping customers loyal is the major challenge facing providers. As OTT adoption nears the 60 per cent range, operators need to address every point of the customer journey and work harder to keep new and old subscribers alike.”
The research also indicates that despite global OTT brands Netflix and Amazon Prime driving pay- OTT growth, the trend is also creating opportunities for local operators, as native challenger brands such as Foxtel Play in Australia, Maxdome in Germany and Now TV in the UK show strong potential – with 32 per cent, 22 per cent, and 19 per cent respectively of first-time subscribers planning to sign up to these services this Christmas.
Vaghela notes: “The research provides powerful evidence that the pay-TV sector is a dynamic and rapidly changing marketplace, where incumbency is no guarantee of future success and challenger brands remain on the rise. There is still enormous potential for new and local OTT players to carve their own niche and attract both first-time and multi-service subscribers. The findings make clear that in pay-TV, there is still everything to play for.”
The survey shows more consumers intend to do their holiday television viewing on smart TV sets (85 per cent in 2016 versus 80 per cent last year), while slightly fewer plan to watch on mobile devices, which include smartphones, tablets and laptops (46 per cent versus 42 per cent in 2015) – which tracks with industry figures showing stronger sales of smart TVs with built-in OTT compatibility.
Other key findings include:
“Clearly, no OTT operator can take continued growth for granted but must find ways to build brand and strengthen loyalty,” Vaghela says. “Increasingly providers need to look beyond their content offering and use data-based insights to engage subscribers at the right time, with packages that meet their needs, while providing a positive overall customer experience.”