Consumers that have a home broadband connection continue to find utility in over the top (OTT) video, a trend that Parks Associates says has over 50% of subscribers purchasing multiple services.
Parks revealed in its latest research, which is being showcased in conjunction with its CES 2017 event CONNECTIONS Summit: IoT and the Smart Home, that 31% of U.S. broadband households have multiple OTT service subscriptions. The research firm said this is nearly one-half of the 63% of U.S. broadband households subscribing to at least one OTT service.
“Consumer willingness to subscribe to multiple services provides the consumer-paid revenues necessary for continued industry growth,” said Brett Sappington, senior director of research of Parks Associates, in a release.
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Today, the two most popular OTT video services are Netflix and Amazon Video. According to Parks, 12% of all U.S. broadband-enabled households subscribe to these services.
Sappington said that Netflix and Amazon’s dedication to developing original content like “The Grand Tour” and “Gilmore Girls: A Year in the Life” “ensures the large OTT players will remain a core, consistent subscription among service-stacking households.”
Despite their lead, Netflix and Amazon continue to add new innovations to their service offerings. Parks said that while Netflix has not announced its plans for CES 2017, rumors have been swirling that the online video provider could debut an offline video viewing mode.
Providing offline access to online video services has begun to emerge. PlayOn, a streaming video recorder service, debuted PlayOn Cloud and an iOS app, which will allow users to record SVOD content and access it offline via a mobile device, for example. In addition to Netflix, PlayOn offers offline access to a number of other popular OTT video services, including Amazon Video, Hulu, Yahoo! View, HBO Now, YouTube, NBC, ABC, CBS, Fox, PBS and The CW.
Amazon, which recently launched a standalone streaming music service, is working to tie its online services to its expanding ecosystem of connected home products, including the Echo.
Spending patterns of consumers on OTT video service continue to rise. U.S. consumers pay an average of $29 per month for incremental video-related entertainment beyond pay TV, while U.S. broadband households spent only 80 cents per month buying video downloads.
“The average spending on subscription OTT video has increased over the past four years, with a notable jump in 2016,” said Glenn Hower, senior analyst for Parks Associates, in the release. “The average monthly spend of $7.95 on subscription OTT video services is remarkably close to the $7.99 pricing of the lowest tiers of service for Netflix and Hulu, indicating that consumer expectations for U.S. market pricing has been set by Hulu and Netflix.”
Looking toward 2017, Parks said that a key trend will be the increase of online TV services and live broadcasts of linear channels. Hulu and YouTube are expected to launch a number of new services.