Report: OTT Softening Demand for À La Carte

Strong percentage still wants it, but numbers decline for a fourth straight quarter, per Digitalsmiths March 17, 2016

DURHAM, N.C.—The idea for paying only for the TV channels that you want is still a popular idea among Digitalsmiths 3,100 respondents to its Q4 2015 Video Trends Report, but not as it once was. The report indicates that for the fourth straight quarter the percentage of people want an à la carte channel option has decreased. One possible reason for this could be the emergence of OTT services.

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In Q1 of 2015, 81.6 percent of respondents to Digitalsmith’s report said they would like the ability to make their channel package by selecting only the channels they want to watch. But by the end of the year, that number had decreased to 73.6 percent.

A total of 61.3 percent of respondents said that they were aware of OTT services like Hulu, HBO Now, CBS All Access and new offerings like Sling TV and Sony’s PlayStation Vue. Just shy of 20 percent (19.9 percent) or respondents said they subscribed to one or more of these monthly subscriptions. However, those numbers do not include the two most popular OTT services, Netflix and Amazon Prime. Netflix users made 48.1 percent of the respondents, while 19.6 percent of all respondents used Amazon Prime.

The top reasons for respondents using these monthly/rental services have remained practically unchanged since Q2 of 2013. Respondents find them convenient, they are cheaper, and they allow the opportunity to watch certain TV shows and whole seasons.

Digitalsmiths also shows that Pay-TV providers are also helping to ebb the demand for à la carte, but not as much as OTT. Pay-TV providers’ TV Everywhere offerings—i.e. apps on smartphones and tablets—are more of a known factor among respondents. In Q4 2015, 40 percent said they were aware that their pay-TV provider offered an app to watch content, an increase of 13.6 percent over three years. While the percentage of who have the app on their smartphone or tablet decreased 2.4 percent since Q3 2015, 45.4 percent of those that do have it say they use it weekly.

While à la carte is still a popular idea for many respondents, Digitalsmiths report shows that OTT, and to an extend TV Everywhere, services are providing new alternatives.

To see the full report visit digitalsmiths.com.

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