Seventeen percent of U.S. broadband households are likely to subscribe to an OTT HBO service
New OTT Video Research addresses Competitive Challenges for Pay-TV providers and Operators
New Parks Associates video research finds 17% of U.S. broadband households are likely to subscribe to an over-the-top (OTT) video service from HBO. Among these likely subscribers, 91% are currently pay-TV subscribers, and roughly one-half would cancel their pay-tv service after subscribing to this HBO OTT service. The research firm reports the average head of household in a U.S. broadband household watches nearly 3.5 hours of OTT video each week on a TV set.
The 360 View Update - Market Focus Consumer Segmentation: OTT Video Buyers, which includes a Q4 2014 survey of 10,000 U.S. broadband households, finds an HBO OTT offering will create competitive challenges for all ecosystem players, including Netflix, Amazon, and pay-TV providers.
“HBO picked a good time to announce its standalone HBO Go OTT service in the U.S.,” said Glenn Hower, Research Analyst, Parks Associates. “The percentage of subscribers interested in OTT video services is trending upward, and more industry players are planning to launch their own OTT services. DISH announced at CES 2015 that its OTT service, Sling TV, will include live TV such as CNN, ESPN, ESPN2, TNT, and TBS. Sports programming could be a major addition for standalone OTT services as sports is one of the primary reasons consumers elect to keep pay-TV services.”
“2015 is set to be the year of OTT,” said Brett Sappington, Director, Research, Parks Associates. “Along with the new services from CBS, HBO, and DISH, we expect several other players to launch or announce services in the U.S. market in the next few months. In Canada, Rogers Communications and Shaw Communications unveiled their shomi online video service in November. In Europe, several players are starting up new OTT services to counter the entry of Netflix into their markets. Others are expanding their OTT offerings in order to reach customers both in their home markets and expatriates who want to watch programs from home.”
Over 50% of U.S. broadband households subscribe to an OTT video service, but Parks Associates analysts say this finding does not mean consumers are ready to abandon their televisions.
“This shift to the use of OTT on the TV screen will impact the entire ecosystem, including pay-TV providers, broadcasters, cable networks, and advertisers. Everyone will need to adjust to a new way of doing business,” Sappington said.
“Television is not dying, but it is evolving,” Hower said. “Linear video comprises only a slim majority of video viewed on the TV screen at 51%, and overall video consumption has shifted to on-demand sources. The age of appointment television is coming to a close, and programming will need to adapt to an on-demand environment.”
The complimentary whitepaper The Connected Consumer: Top Trends in IoT, released at 2015 International CES, provides insight on global trends for 2015 in entertainment services and digital media.
The firm will host the 19th-annual CONNECTIONS™: The Premier Connected Home Conference on May 19-21, 2015, in San Francisco. CONNECTIONS™ features interactive panel sessions focused on innovative technology and business solutions for the connected consumer, entertainment services, the smart home, and the Internet of Things.
Parks Associates industry reports “Modern Broadband: Maximizing Retention and Revenues” and “Under Attack: Assessing New Threats to Pay TV” address new strategies to attract customers as well as the current state of the video and pay-TV markets.
To schedule an interview with an analyst or request specific data, contact Holly Sprague at firstname.lastname@example.org, 720.987.6614. Download the CONNECTIONS™ Summit presentations at www.connectionssummit.com.
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 the Internet of Things (IoT), 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, Smart Energy Summit: Engaging the Consumer, and Connected Health Summit: Engaging Consumers.
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