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‘Over-the-Top’ TV booming and subscription rates poised to soar even higher this Christmas, Paywizard study shows

Over-the-Top (OTT) pay-TV services are surging in popularity as the percentage of consumers subscribing nearly doubled over the past year, global survey reveals

London(09 Dec 2016)

Television audiences across the world are wholeheartedly embracing online pay-TV, as the proportion of consumers with Over-the-Top (OTT) subscriptions has leapt from 25% to 45% in just 12 months with even more planning to sign up prior to Christmas, new research from subscription, billing and CRM specialist Paywizard reveals. The study also reveals that 30% 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% in 2015 – with 18% planning on subscribing for the first time and 12% 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% 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 United States, the United KingdomGermanyBrazilAustralia and Singapore.

While Christmas 2016 looks strong for OTT operators, as the projected new subscriber figures (18%) added to those for existing customers (45%) would take the total percentage of subscribers to 63% after Christmas. However, the findings also reveal that 50% of those planning to take an OTT service for the first time this holiday season intend to cancel their subscription within six months.  Bhavesh VaghelaPaywizard’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% 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%, 22%, and 19% 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% in 2016 versus 80% last year), while slightly fewer plan to watch on mobile devices, which include smartphones, tablets and laptops (46% versus 42% in 2015) – which tracks with industry figures showing stronger sales of smart TVs with built-in OTT compatibility. 

Other key findings include:

  • Pay-OTT adoption by millennials remains strongest with 52%of all survey respondents under age 35 now having a subscription
  • Nonetheless, other key demographics are catching up, as 47% of 35-44-year-olds now have a pay-OTT service, compared to just 27% last year, while 45-54swith subscriptions have risen to 42% from 25%
  • Younger audiences are more likely to sign up to OTT, with under-35snow nearly three times as likely to subscribe before Christmas as the 55-plus age group
  • Top of the list of factors that would make an OTT subscriber terminate service is “too expensive”with 63% of those that already have a subscription listing it among the top three reasons they would cancel
  • While “not much too watch”was the next most popular answer (42%)“bad customer experience” (35%) was nearly as prevalent a reason and nearly as many list “provider does not seem to care about what I want and so doesn’t cater to my needs” (30%)

“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.”

For more research results, download the full report, entitled OTT isn’t just for Christmas: The Gift that Keeps on Giving by clicking here. 

About Paywizard

Paywizard has been supporting subscription-based businesses for over 18 years. Our experience is real. Helping over 100 Pay-TV operators including: ITV, eir Sport, BT Sport, and BoxNation.