Tuesday, July 16, 2019

Parks Associates forecasts $12.5B in lost revenue in 2024 due to pay-TV and OTT piracy and account sharing

Consumer research examines consumer preferences for various piracy behaviors 

Parks Associates research forecasts that in 2019, OTT and pay-TV companies will see $9.1 billion in lost revenue due to piracy and account sharing. 360 Deep Dive: Account Sharing and Digital Piracy reports this number will grow to $12.5 billion in 2024, a growth rate of 38%. Currently 27% of US broadband households engage in some form of piracy or account sharing.

“Piracy is a complex issue that cannot be addressed with a single solution or by targeting a single use case,” said Brett Sappington, Senior Research Director and Principal Analyst, Parks Associates. “Most pirates also subscribe to at least one OTT service. They are not simply thieves looking to steal content but are video enthusiasts who engage with many different services. OTT services could better reach these consumers through ad-based content, which also aligns with these users’ general belief that ‘movies/music should be given away for free.’”

Parks Associates Chart OTT Service Subscriptions

Consumers who report viewing an OTT video service for free but without ads are 22% more likely than average broadband households to subscribe to OTT services, three times as likely to use ad-supported services, and twice as likely to use transactional online video services. Growth in connected device ownership has shifted the focus of pirates towards the online video ecosystem—20% of US broadband households are using a piracy app, website, or jailbroken device.

 “Growing subscriber numbers and an increased number of services signal a very healthy OTT market, but more services and aggressively promoted content could incite more piracy over time,” Sappington said. “Consumers will hit an upper limit to spending eventually. When that happens, they will resort to pirate tactics to get the content that they want, particularly for sports and other content where trials are not available.”

Demographics that most often subscribe to OTT services are also those who most often engage in piracy or account sharing. Men, consumers under age 35, and households with low annual incomes pirate content at a disproportionate rate.

360 Deep Dive: Account Sharing and Digital Piracy examines consumer preferences for various piracy behaviors, as well as attitudes towards privacy and account security.

Additional research:

  • 13% of consumers report using a piracy website or app.
  • 19% of US broadband households experience account-related issues with an online video service.
  • Penetration of OTT paid services was up 13% over the past year, while free services increased 23% over 2018.
     

For information on 360 Deep Dive: Account Sharing and Digital Piracy, contact sales@parksassociates.com. To schedule an interview with an analyst or to request specific research data, please contact Sherrelle Lewis at sherrelle.lewis@parksassociates.com, 972-996-0214.

About Parks Associates

Parks Associates is an internationally recognized market research and consulting company specializing in emerging consumer technology products and services. Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500 to small start-ups through market reports, primary studies, consumer research, custom research, workshops, executive conferences, and annual service subscriptions.

The company's expertise includes digital media and platforms, entertainment and gaming, home networks, Internet and television services, digital health, mobile applications and services, support services, consumer apps, advanced advertising, consumer electronics, energy management, and home control systems and security.

Each year, Parks Associates hosts industry webcasts, the CONNECTIONS™ Conference Series, Connected Health Summit: Engaging Consumers, Smart Energy Summit: Engaging the Consumer, and Future of Video: OTT, Pay TV, and Digital Media. http://www.parksassociates.com

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