YouTube, Amazon close gap on Netflix in race for American living room, says comScore

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While YouTube has long been king of online video distribution, controlling notebook computers, smartphones and tablets, it has always ceded leadership of over-the-top distribution in the American living room TV set to Netflix. But that's changing fast, according to comScore.

The research firm reported that while Netflix reached 75% of homes as of December 2016, YouTube was being viewed in 53% of those homes. Not far behind were Amazon Video, with 33% reach, and Hulu, which came in fourth at 17%.

OTT providers 2016 Image: comScore

The research firm said in a new report that there are “11 OTT services that reach one million or more homes in a given month.”

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“For many, this transition to watching over-the-top (OTT) content began with a subscription to Netflix,” comScore said. “While Netflix can claim much credit for spurring this transition to OTT, there are emerging signs that the medium is now growing well beyond its largest player, as other services are now capturing the attention of viewers and staking out their respective positions in the market.”

Competing services gain ground

Netflix’s dominant status in the overall OTT video market continues to be challenged. ComScore noted that Netflix has fallen to second place in terms of home viewing engagement with 28 hours of average viewing time for each home.

By comparison, Sling TV, which has appealed to the cost-conscious, cord-cutting consumer with a “skinny bundle” that includes multiple content sources, has been able to surpass Netflix with 47 viewing hours per month.

Interestingly, although three out of four OTT video homes use Netflix, the other 25% of these same homes use other services like YouTube and Twitch. According to comScore, more than 30% of YouTube’s and Twitch’s users do not view Netflix from their television sets.  

Besides YouTube, Amazon Video has gained momentum by making its services accessible on Amazon Prime and the Fire TV platform. Although Netflix remains the dominant service on Roku, gaming consoles and Blu-ray Disc players, Netflix trails Amazon and YouTube on the Fire TV stick/box.

Broader adoption coming

Regardless of the competitive challenges that Netflix faces, consumer adoption of new options shows the growing acceptance of the OTT video service viewing market.

ComScore says that as of December 2016, 50% of households are not using an OTT service. This means that there’s plenty of time for existing and emerging OTT video players to lure more customers to tune in online.

Such a thesis is not off base, particularly as more consumers grow tired of paying hundreds of dollars to their cable or satellite provider.

Recent research from Parks Associates revealed that 20% of U.S. pay-TV subscribers say they are dissatisfied with their pay-TV service, representing a 100% increase since early 2013. These viewers are potential prime targets for OTT services.

Parks said that 63 million U.S. broadband households subscribe to an OTT video service, and 36% of U.S. broadband households have at least one streaming media player.