Amazon, Netflix, analysts cite divergent growth potential in downloadable video apps

TV Everywhere
Netflix began offering download-to-go video service capability in November 2016.

Amazon, Netflix and Comcast’s effort to offer consumers downloadable video has created growing buzz in the SVOD industry segment, but analysts and video vendors remain divided on how big the opportunity actually is.

Following Amazon’s lead, Netflix announced in November that it would provide its own download-to-go (D2G) video service capability. Netflix, which has been the bellwether of the online video provider market, appears to be treading carefully into the downloadable market. Neil Hunt, chief product officer for Netflix, told Gizmodo in September that “we'll see if it's something lots of people will use."

But the question is what is Hulu going to do? In January, CEO Mike Hopkins said that Hulu will be offering downloadable content some time this year. 

RELATED: Netflix finally enables downloads; Hulu could soon follow

Companies like Penthera, a provider of video software products that has created a software development kit that allows video operators to integrate downloadable features into their TV Everywhere products, sees potential. In a recent survey, the vendor revealed that over one-third of 1,000 respondents reported that availability of D2G would make them more likely to subscribe and/or less likely to cancel a streaming video service. And 56% reported that they used the feature at least once in the last year, with more than half of that segment using it daily, weekly or monthly.

Some analysts remain skeptical about D2G, however. Alan Wolk, lead analyst at TV[R]EV, told FierceOnlineVideo that while downloadable video applications have some value, they won’t dissuade consumers from purchasing a SVOD service.  

“I think it will become table stakes for most services, as people want to be able to take their shows with them when they are on the road, but unlikely to be a deal breaker,” Wolk said. “If HBO did not offer it, I don’t think it would dramatically impact their business.” 

Communicating availability

While more users are starting to use downloadable video services from whoever provides their SVOD player, Penthera says the “video industry needs to do more to communicate its availability.” According to Penthera’s study, one-third of the 700 Netflix subscribers who completed the survey either thought that Netflix didn’t offer D2G or didn’t know, even though Netflix has offered D2G since November 2016. 

Other SVOD players like Comcast, which has been offering D2G even longer, have had similar results.

The cable MSO has continued to tout its Xfinity TV Player app, which allows users to download thousands of premium TV and movie choices from Showtime, Starz, Encore and MoviePlex at no additional cost, on TV ads and the internet. Comcast hopes it can access a segment of the 36 million mobile phone owners in the United States that watch video or TV on their phones.

RELATED: Downloads give SVOD platforms another subscriber hook

Joel Espelien, senior analyst for TDG, isn’t convinced that the application has yet to really take off in a significant way, however.

“Downloadable solutions have been around for over a decade, and have never generated mass-market usage,” Espelien said. “If this was so huge, why wasn't it huge earlier when wireless networks were slower, more expensive and less available?”

Espelien added that one possibility would be where You Tube could offer children the ability to access Minecraft applications.

“The biggest untapped market for downloadable video would probably be YouTube if they let kids download Minecraft videos so they could watch them on their tablets in the car,” Espelien said.

No connection required

One potential benefit of D2G is that it does not require an immediate internet connection. This could be relevant in situations like being on a flight or out of range of a Wi-Fi hot spot. When asked to list advantages of D2G, Penthera said half listed the ability to watch without an Internet connection. 

Wolk said that most consumers can access a broadband or Wi-Fi connection either in their homes or at the local coffee or retail shop.

“Most people have regular access to Wi-Fi,” Wolk said “It’s good for commuters and travelers who can download movies for a plane trip. But that’s not a market I’d start a business off of.”

He added that D2G might be more of a fit in countries that don’t have widely available internet services.

“I think there is maybe a market for this outside the U.S., in countries where there is limited broadband access and multiple people share a tablet or smartphone as their only way to watch video,” Wolk said.