Average spending on OTT services has stayed flat for 3 years, Parks Associates says

money
A contributing factor to flat OTT spending growth is the 30% of consumers who don't pay for any subscription video services.(Pixabay)

Despite an ever-growing array of OTT streaming video services in the U.S., the average amount of money consumers spend on OTT services has stayed flat for the past three years.

According to Parks Associates, U.S. consumers have on average shelled out just under $8 per month on subscription OTT services every year since 2016. The research firm said this flat growth is likely due to the adoption of multiple services or expensive services by some consumers being offset by a larger base of consumers who either subscribe to one or two relatively inexpensive services. Another factor is the 30% of consumers who do not spend any money on OTT video services.

"The stability in average household spend belies the activity going on under the surface," said Brett Sappington, senior director of research at Parks Associates, in a statement. "2019 may be poised to break that trend. Netflix, Hulu, and Amazon continue to pack on new subscribers. At the same time, services like ESPN+ are also experiencing phenomenal growth, and new offerings from Disney and WarnerMedia are set for release later this summer. One of three things will happen—more households will become OTT streaming households, rival services will begin to pull subscribers away from Netflix, or that spending number will go up."

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceVideo!

The Video industry is an ever-changing world where big ideas come along daily. Cable, Media and Entertainment, Telco, and Tech companies rely on FierceVideo for the latest news, trends, and analysis on video creation and distribution, OTT delivery technologies, content licensing, and advertising strategies. Sign up today to get news and updates delivered to your inbox and read on the go.

RELATED: Parks Associates: 52% of U.S. broadband households watch online video on TVs

Parks’ newest research coincides with numbers the firm put out earlier this month that suggest even though a majority of U.S. broadband households now watch online video on connected TVs, the overall number of hours spent watching video has declined. At the same time, some fatigue with subscription services may be setting in.

"As consumers' taste for OTT experimentation wanes, they will start to resist the push to add another monthly subscription to their households," said Billy Nayden, research analyst at Parks Associates. "Many providers are starting to lead with freemium and ad-based models, in anticipation of this pushback."

But despite the flat rate of growth for SVOD spending in the U.S., services like Netflix and Hulu are still on average snatching more money away from consumers than other forms of video. The firm found that the average U.S. broadband household is spending about $6 per month on movie tickets, fewer than $3 on DVDs, approximately $2 on Blu-ray discs, and less than $2 on renting DVDs.

Suggested Articles

Amazon Prime Video and Netflix have dominated the SVOD market, and both have expanded globally—strategies that are paying off for both companies.

Ad-supported streaming service Xumo has already been growing its monthly user base, and now the company is setting an ambitious goal for increasing streaming…

Verizon Media is opening a 5G production studio in Los Angeles in cooperation with the company’s immersive media firm, RYOT.