Report: Euro SVoD adoption not driving cord-cutting
May 8, 2018
Far from being seen as a replacement for pay-TV, both multichannel and non-multichannel TV households in Europe are adopting online SVoD services, primarily as supplemental video entertainment, according to findings from Kagan, the TMT research arm of S&P Global Market Intelligence.
According to analyst Keith Nissen, while a number of cord cutters are adopting SVoD, the overall percentage of cord cutters is flat or declining, suggesting that people are not dropping pay-TV in favour of SVoD.
A comparison of survey results from the firm’s Consumer Insights European surveys conducted in 2015 and 2017 shows that the use of online SVoD services is growing. Over the past two years, the use of online SVoD services in the UK by Internet households has grown 7 percentage points, or ppts, to 56 per cent.
Germany and France have also shown positive growth over the same time period, albeit at a much slower pace than in Britain. Our 2017 survey found that 44 per cent of internet households in Germany and 35 per cent in France have used an online SVoD service over the past three months.
Key takeaways from the report:
- A comparison of survey results from Kagan’s Consumer Insights European surveys conducted in 2015 and 2017 shows that the use of online SVoD services is growing.
- Over the past two years, the use of online SVoD services in the U: by internet households has grown 7 percentage points, or ppts, to 56 per cent. Germany and France have also shown positive growth over the same time period, albeit at a much slower pace than in Britain. Kagan’s 2017 survey found that 44 per cent of Internet households in Germany and 35 per cent in France have used an online SVoD service over the past three months.
- In addition to the overall growth of SVoD services, consumers are often using more than one online video service. In the UK, 28 per cent of Internet households reported adding an SVoD subscription during 2017, while only 12 per cent said they dropped an online video subscription last year. Similar results were found in Germany where 26 per cent added an SVoD subscription compared to 10 per cent dropping a service. Even in France where online SVoD use remains relatively low, 17 per cent added and 6 per cent dropped an SVoD service last year.
- Comparing historical data over the past two years shows that the level of non-multichannel TV households in the UK and Germany has remained essentially flat within the statistical margin of error. Data from the France surveys shows a 7-ppt increase over 2015 and 2016 levels. However, none of the three countries exhibit the steady increase in non-multichannel TV households typically associated with a video cord-cutting trend.
- In 2015, Kagan survey results indicated that the majority (55 per cent) of multichannel TV households in the UK subscribed to at least one online SVoD service. By 2017, SVoD usage among pay TV households increased 6 ppts to 61 per cent. Adoption of online SVoD services by UK video cord cutters and cord-never households had even more impressive growth, increasing by 15 ppts and 8 ppts respectively.
- The German survey data shows that the percentage of multichannel TV households subscribing to an online SVoD service declined 2 ppts over the past two years, with SVoD adoption concentrated among video cord cutters (+15 ppts) and cord never households (+12 ppts). The data also indicates that the minimal growth of SVoD usage in France was evenly distributed across all three video household categories.
- Kagan data shows that over the wo years the level of non-multichannel TV households in the UK and Germany has remained essentially flat. France’s survey data shows a 7-ppt increase over 2015 and 2016 levels. However, none of the three countries exhibit the steady increase in non-multichannel TV households typically associated with a video cord-cutting trend.