The result of increased access in US homes not only to high speed networks but also over-the-top (OTT) content is driving a huge uptake in online video according to new research by Parks Associates.
In its Video-on-Demand: The Road to Revenues, a first quarter 2013 survey of 10,000 US broadband households, the analyst found that 44% of US broadband homes currently have a subscription to some kind of online video service, such as Netflix, Hulu Plus, or Amazon. In the survey, almost half watched films related to a TV programme or TV channel while around the same proposition watched a local TV service for movies. Around half the sample watched a regular pay-TV channel. Younger consumers were found to be more likely to subscribe to OTT services, 8% of whom, alarmingly for pay-TV providers, have never subscribed to a subscription TV service.
"Consumers have a variety of viewing options now thanks to OTT content, which is dismantling the traditional TV business models," said Heather Way, senior analyst, Parks Associates. "Online video is now a common source of video viewing in US households, while transactional VOD (TVOD) is near the bottom."
Looking as to how such demand will be monetised, Parks observed the use by industry players, from service providers to retailers, of business models including advertising, t-commerce, transactions, and subscriptions.