OTT Services Diversify As Consumers Supplement Their Pay TV

Half of U.S. consumers subscribe to both
Author:
Publish date:

ADDISON, TEXAS—New consumer research from Parks Associates showed 53 percent of U.S. broadband households subscribe to both a pay TV service and at least one OTT video service.

Image placeholder title

The research from Parks Associates, “OTT Video & TV Everywhere: Partners, Alternatives, and Competition,” reported that more than 200 OTT video services are now active in the U.S. market as of Q3 2017, with more than 100 active in the Canadian market. The report noted that 60 players introduced OTT video services during 2016 and 2017, while only seven services closed during that same period.

“Many OTT services are evolving to be complementary to the market’s largest players, instead of trying to compete directly against Netflix, Amazon, and Hulu,” said Brett Sappington, senior director of research, Parks Associates. “Also, consumers are increasingly self-aggregating their OTT and entertainment services — they are adopting primary entertainment content sources and supplementing those sources with complementary video options.”

The report analyzes the evolution of OTT video services, including changes in market competition, new partnerships, and changing priorities by consumers.

“Several factors are driving an increase in partnerships with and among OTT video services, including fragmentation of content, the success of bundling, polarization in the OTT subscription market, a low threshold for OTT service survival, and low awareness of many OTT service brands,” Sappington said.

Additional research in the report showed:

• More than 87 percent of OTT video services in the U.S. and 86 percent in Canada offer some type of subscription options today, including freemium, ad-free premium tiers and other blended business models.
• Awareness and use of TV Everywhere features have slowly increased over the past few years, reaching 34 percent by late 2016.

This story originally appeared on TVT's sister publication TWICE