Subscription video streaming services are increasing their share of the money consumers spend each year on internet TV and movies.
According to new research from Parks Associates, subscriptions now account for nearly 86% of total spending, up from about 50% of total online video spending in 2012. This percentage is likely to trend up in the near future as new streaming services from Disney, Apple, WarnerMedia and NBCUniversal launch.
"The new services launching over the next several months are taking different approaches as they enter a crowded OTT market," said Brett Sappington, senior research director and principal analyst at Parks Associates, in a statement. "While the U.S. market is important for Disney, the company will ultimately measure the success of its Disney+ service on a global scale. AT&T likely sees its AT&T TV offering as the evolution of its core pay-TV business rather than as an extension of its vMVPD efforts. The Frndly TV is a niche play, targeting a specific group of consumers with a low price and family-friendly content."
But, Parks said that all the new streaming services will also test consumers' tolerance for adding new accounts to their monthly expenditures.
"The amount of money consumers spend per month will spike, at least in the short term, as new services such as Disney+ and Apple TV+ become available. Trade-off decisions will come later," Sappington said. "To keep consumers spending at this higher level, services will have to consistently deliver volumes of compelling content within an engaging user experience."