Majority of U.S. Broadband Homes Subscribe to an OTT Service
Over-the-top (OTT) video services are now so popular that the majority of U.S. broadband-enabled homes use them. According to research from Parks Associates, 58 percent of homes used at least one OTT service in the past 30 days. Over 25 percent of homes used multiple services in the past 30 days.
While that sounds like an important milestone for the industry, Parks warns that OTT adoption has already slowed.
“Despite impressive penetration, growth of U.S. OTT services has slowed recently, indicating the overall market for SVOD service might be saturated,” says Glenn Hower, a research analyst for Parks Associates.
Netflix is the clear subscription video-on-demand (SVOD) leader, but Hulu and Amazon have sizable audiences, as well.
“Netflix continues to dominate the OTT space, with 43 percent of U.S. broadband households subscribing to its service,” Hower says. “After Hulu and Amazon, with 19 percent and 17 percent respectively, penetration of OTT services drops drastically. However, with new niche services emerging that focus on targeted content and audiences, there is still room for growth in the space.”
In July, Parks cautioned that OTT services have high churn rates. At the time, almost 9 percent of Netflix’s customers and almost half of Hulu’s customers had cancelled service in the past 12 months.
The number of households getting their video services solely through broadband connections is rising, while OTT churn is holding steady at 18 percent.
U.S. viewers are testing the waters, sampling streaming video services quickly then moving on to try something else.
Many Americans will find a set-top box under the tree this year. Roku is the category leader, followed by Chromecast.
A study of set-top box adoption finds that Roku has a commanding lead, thanks to an association with Netflix and a smart product strategy.