Wednesday, September 11, 2013

44% of Fixed Broadband Homes Buy an OTT Subscription Video Service

About 44 percent of U.S. fixed broadband subscribers currently have a subscription to some kind of online video service, such as Netflix, Hulu Plus, or Amazon, according to Parks Associates.

You might argue that points to consumer behavior that is a precursor of some future shift in TV delivery. Consumers have become accustomed to watching Internet-delivered video, and have gotten familiar with the idea of buying a video service from an entity other than a cable, satellite or telco TV provider.

You might argue the next intervening step will be further bundling of access to services such as Netflix with standard linear video services. That, in fact, is precisely what Virgin Media plans to do in the United Kingdom.

Virgin Media is testing delivery of Netflix video to its customers using TiVo boxes. The test will involve about 40,000 of its Tivo-using subscribers.

Virgin Media said it planned to roll out the app to all of its 1.7 million TiVo customers by the end of 2013.

Younger consumers are more likely to subscribe to over-the-top video services, and eight percent  of consumers 18-24 have never subscribed to a cable, telco or satellite delivered video 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, Parks Associates senior analyst.

For whatever combination of reasons, over the top video is much more popular than the video industry’s traditional video on demand product.

"Online video is now a common source of video viewing in U.S. households, while transactional VOD (TVOD) is near the bottom,” said Way.


It is probably reasonable to assume that 70 percent of broadband users watch online video, including sources such as YouTube and paid subscriptions such as Netflix.

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