SVOD providers Netflix, Hulu, others steamroll pay TV in content discovery ease of use, report says

Subscription OTT services like Netflix (NASDAQ: NFLX), Amazon (NASDAQ: AMZN), Hulu and HBO Now are dominating the content discovery race, particularly among millennial-aged audiences. A new Digitalsmiths report found that 78.2 percent of users surveyed said that OTT providers' discovery functions make it easy for them to find content they want to watch.

Paid video on demand (PVOD), which includes digital rentals and sales, ranked second in ease of discovery, while linear television landed in third place with just 58.2 percent of respondents saying it was easy to find something to watch on the traditional tube.

Content discovery seems to favor younger viewers as well: Millennials are much more engaged with content discovery functions, including content recommendations, than people in the oldest surveyed age demographic, 61-70.

"The fact that linear TV ranks third, or last, in the eyes of respondents, when it comes to ease of finding content, combined with the fact younger generations are more engaged with content discovery features, demonstrates this type of technology should be a priority for video service providers," Digitalsmiths said in the report.

Digitalsmiths conducts a survey each quarter through a third-party provider to take the pulse of the video industry. The firm surveyed 3,153 participants in the U.S. and Canada for the third quarter aged 18 and over on a number of topics around subscription OTT, PVOD, TV Everywhere and pay-TV viewing.

The report found a few other notable changes in the third quarter of 2015 compared to the same period a year previous. For example, the top three SVOD services all saw continued steady growth in viewing: 49 percent of the survey respondents use Netflix, up from 46.4 percent last year; while 19.9 percent view content on Amazon Prime, up from 17.9 percent in the third quarter of 2014. Hulu saw a jump in viewership to 12.1 percent of respondents, up from 9.6 percent.

And new entrant HBO Now ranked fourth in the survey, with 4.9 percent saying they use the standalone streaming service.

Just 1 percent of those surveyed said they watch Sling TV, putting it slightly behind PlayStation Vue, which 1.3 percent use. Another 1 percent said they used Blockbuster OnDemand, a service that in November was officially shut down and its customers rolled into Sling TV by parent company Dish Network (NASDAQ: DISH).

Another 43.7 percent of respondents said they do not use any subscription streaming service.

The majority of those surveyed, 32.39 percent, streamed video for between 1 and 2 hours per day.

Pricing is seeing an interesting evolution, too. The "sweet spot" -- what consumers are willing to pay, total, for SVOD services -- still sits between $6-8 per month, but an increasing number are willing to spend more for streaming services. The high end of spending, $15-30 per month, saw a 4.4 percent jump, with 25.2 percent of respondents saying they pay somewhere in that range for a combination of subscription services -- suggesting that consumers are increasingly willing to pay more to get the services and content that they want.

Convenience and price are still the biggest reasons to subscribe to an OTT service, the survey found. Of those surveyed, 56.9 percent listed convenience as the biggest factor in using OTT services to view content rather than pay-TV services. But that was slightly down over the past two years. Meantime, price became increasingly important to consumers, with 49.1 percent citing it as the main factor in using SVOD.

Smartphones still dominate among mobile devices used for streaming video, followed by tablets -- but the content viewed on each type of device is a bit different. On tablets, the top three content types viewed are movies, reruns of TV shows, and news; smartphone users said they watch movies, TV show previews or clips, and news most often.

For more:
- see the release

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