Advanced Television

Data: Ad experience influences SVoD choices

May 2, 2024

Kantar, the marketing data and analytics company, has releases its latest Entertainment on Demand (EoD) data and analysis on the global video streaming landscape.

The latest EoD global study highlights key trends within the VoD landscape as competition continues to intensify, with subscription stacking rising. For instance, Kantar’s data shows that AppleTV+ was the fastest growing major SVoD service in Q1 2024, in terms of its subscriber growth. In addition, Netflix had a strong Q1 in Europe and Australia, along with local services such as Movistar+ in Spain, Joyn Plus+ in Germany, and Kayo in Australia all seeing elevated levels of new paid subscriber share.

Key insights within the VoD market from January to March 2024 include:

· Apple TV+ was the fastest growing major SVoD service in terms of % subscriber growth

· Local streaming services, Movistar+ (Spain), Joyn Plus+ (Germany) and Kayo (Australia) all experienced a record share of new paid subscribers in their respective territories

· German households were most likely to switch one service for another, with 22 per cent of new subscriptions being a direct replacement

· Netflix’s Net Promoter Score (NPS) rebounded to 18-month highs, at +42 (all markets)

· After a strong Q4, Prime Video suffered a loss in users in Q1

· Reacher (pictured) on Prime Video was the most enjoyed title in Q1 among all streamers, followed by Fool Me Once on Netflix, and Yellowstone on Paramount+

· Australian and German households showed heightened price sensitivity in Q1, with higher levels of cancellations attributed to ‘wanting to save money’

· VoD household penetration has increased across nearly all markets tracked from Q4 2023 to Q1 2024, with only GB marginally down

Disney+ Explores ‘Always On’ Programming

As ad-tier viewing models evolve, Disney+ are now exploring with ‘always on’ programming to enhance viewer engagement and combat cancellations due to infrequent use (1 in 3). Currently, 41 per cent of Disney+ households engage with the service daily, a slight increase year-over-year. Free advertising supported streaming television (FAST) services, which offer scheduled streaming programming is also growing. With 76 per cent of households appreciating the option to have content continuously playing in the background, FAST services are now active in over one-third of households. As FAST services ramp up content investments, expect this growth trajectory to continue throughout 2024 and beyond.

Disney+ still trails behind competitors in terms of household penetration among the background viewing need-state, however they will be hoping these advances will change that. At present, only 20 per cent of households with multiple VoD services choose Disney+ as their primary service and only 5 per cent primarily use it to discover new content. Closing the differentiation gap with key competitors like Prime Video, already offering FAST programming via Freevee, could prove to be a lucrative move for Disney+ with their beloved franchise content, and new Disney originals sure to be popular.

Ad Experience Influencers Subscriber Choices

Over the past year, the VoD industry has seen significant shifts with new ad tiers and price increases being regularly introduced. Consumer acceptance of ads for lower prices has grown, with 49 per cent of VoD households in favour, up from 44 per cent last year. Despite this, the quality of ad experiences remains crucial.

Prime Video introduced ads in Q1, offering an ad-free option for an additional fee. Despite Prime memberships being unaffected, this change led to a drop in Prime Videos user base. Prime Video have the highest level of subscribers displaying an active dissatisfaction with the number of ads being served, compared to other major services. In addition, the combination of recent price rises, and ads has also led to drop in net satisfaction with value for money among the Prime Video subscriber base, at 25 per cent currently (vs 29 per cent in Q4 2023), however it must be noted, this does still outdo competitors.

In contrast, Netflix continues to excel, with strong retention rates and the highest subscriber advocacy levels in 18 months with an NPS of +42, indicating a solid and growing subscriber base.

Strong Q1 for Local Services

Typically, Q1 starts with a slight pull back in penetration given the holiday period boom. However, Q1 2024 saw notable growth in local VoD services across various markets. Local services, Movistar+, Joyn Plus+, and Kayo recorded significant increases in their share of new paid subscribers.

Movistar+ attracted subscribers with its extensive sports coverage, quality of content, and variety of live streaming options. Joyn Plus+ converted many existing Joyn users to premium subscriptions, particularly through reality shows and sports, capturing 38 pr cent of new subscribers with specific content appeals. In Australia, Kayo’s growth was driven by its comprehensive sports content, notably AFL, NRL and F1 aided by hosting the Australian Grand Prix. Beyond this, effective TV advertising during the signup process. These trends underscore the importance of tailored content in driving subscriber growth for services, especially when households are continually seeking to optimise their VoD portfolio.

Andrew Skerratt, Global Insights Director at Kantar Worldpanel commented: “The latest data from Q1 reveals a significant shift in the global VoD landscape. AppleTV+ lead with remarkable subscriber growth, while local services like Movistar+, Joyn Plus+, and Kayo excelled in their markets through highly tailored content. Despite mixed reactions to new ad-supported tiers, notably from Prime Video users, Netflix continues to excel in retention and subscriber advocacy. These developments highlight the evolving consumer preferences and the critical need for streaming services to adapt swiftly to maintain and expand their viewer base.”

Categories: Advertising, Articles, Catch Up, Consumer Behaviour, Content, Premium, Research, VOD

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