Shifting demographics, premium tiers drive next wave of SVOD growth | VOD | News | Rapid TV News
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netflix multipledevices 18july2017Despite increased maturity subscription video-on-demand is maintaining its momentum with Netflix and Amazon continuing to lead the charge in the first half of 2017, according to Futuresource Consulting’s latest biannual Living With Digital study.

The consumer research report, covering the USA, Canada, UK, Germany, France, Italy, Spain, Australia and Japan, found that just under half of households in the UK and approximately a quarter in France have at least one SVOD subscription. This compares with two-thirds of households in the USA. The appetite for multiple SVOD services was found to be notably stronger in the USA, driven by the wider availability of offerings and the ability to access different content on different services.

Not surprisingly, Netflix remains the key driver in most markets, but the research indicates that where it is becoming well established, future growth will be increasingly driven by older age groups buying into the service. The leading international market outside the USA for Netflix is the UK where over three-fifths of 16-35 year olds use the leading SVOD system, only marginally behind pay-TV uptake.  However, just a quarter of over-35 year olds were using Netflix, providing the biggest opportunity for future growth. In France, returning subscribers have helped boost Netflix's performance in the first six months of the year, while the service's premium plan uptake has increased in most markets, with 27% of subscribers taking this option in Germany.

Futuresource added that Netflix's momentum was undoubtedly being driven by the increasing importance to viewers of its original TV shows in all countries, with the research highlighting particular increases in the USA, Italy and Spain.

Amazon, Netflix’s main rival in a number of key markets, was also seen to have posted a strong performance so far in 2017 with its Prime service. Two-thirds of US respondents now use Prime, with the figure approaching 50% in Germany. In France, the launch of Prime Video at the end of 2016 has helped the overall Prime service reach almost one-quarter of households. Yet even in the countries where Prime Video is established, the offer is under huge pressure from Netflix. In these markets the gap between the two was widening in terms of the importance of original content to users.

The Living With Digital study also revealed that smart TVs were the most important form of hardware for accessing Netflix, with respondents more often stating that their smart TV is the first platform they go to watch Netflix. In the US, virtually two-fifths of Netflix users said a smart TV was their most used access device, with a further tenth using it as an auxiliary device to top up watching from other devices such as a smartphone, tablet or a PC. A similar trend was observed seen across Amazon Prime Video users in the countries where it is established, whilst iTunes Video users were primarily reliant on Apple TV boxes for big screen viewing.