Hulu SVoD users pick streaming over pay-TV
August 2, 2017
When asked to choose between their legacy pay-TV and SVoD services, Hulu on-demand users are 37 per cent more likely than Amazon Prime users and 29 per cent more likely than Netflix users to select streaming services over legacy pay-TV, according to new research from The Diffusion Group (TDG).
Two-thirds (67 per cent) of Hulu users that also subscribe to a traditional pay-TV service (dual-service users) say that, if forced to choose between the two, they’d stick with their SVoD services. This rate is significantly greater than tallies of both Netflix and Amazon Prime dual-service users (52 per cent and 49 per cent respectively). Conversely, only a third of Hulu dual-service users chose legacy pay-TV, compared with 48 per cent of those using Netflix and 51 per cent of those using Amazon Prime.
“This variance was a bit unexpected,” notes TDG President and Principal Analyst, Michael Greeson. “One would be forgiven for thinking that Netflix dual-service users would be the segment most likely to stick with their streaming services. Given the reach of the service (nearly 100 million viewers versus Hulu’s 47 million) and the relative strength of the Netflix brand, it is not unreasonable to assume that the bond between Netflix and its subscribers would lead to higher numbers.” But according to TDG’s new research, Hulu proved far stickier than legacy-TV when compared to both Netflix and Amazon Prime.
“Keep in mind that Hulu is a very different service than Netflix or Amazon Prime, with broadcast and cable TV shows front and center in its offerings with movies playing a secondary role,” says Greeson. “This makes it a better substitute for live legacy pay-TV than Netflix or Amazon Prime.”
Given this level of brand loyalty, Hulu could have a leg up when it comes to converting its SVoD users to Hulu Live TV subscribers. Then again, much depends on whether this phenomenon is due to a preference for watching TV shows on-demand versus live, or due to a branded quality of experience above and beyond on-demand functionality. If more the former, converting SVoD users to live TV subscribers will prove difficult for Hulu. If more the latter, the chances of conversion are much higher — especially if Hulu can execute a level of integration between live and on-demand that exceeds both incumbent and virtual MVPDs.