Concerned about the growth of subscription video-on-demand services? You should be.
While the majority of consumers view video content from a variety of sources, the percentage of people using only Netflix, Hulu, Amazon Prime Video and other subscription video-on-demand (SVOD) services surged between 2017 and 2018, NPD Group data show.
New released data from The NPD Group shows that 17% of the U.S. population relied solely on SVOD services to view video content in the 12-months ending in March 2018.
This compares to 11% for the previous year.
That said, NPD Group found that, among its respondents, 24% of consumers rely only on renting and buying videos on physical discs or in digital formats — a finding that may surprise some broadcast TV C-Suiters and research experts.
NPD Group also found that 32% of respondents use a combination of transactional and subscription video.
But, it is the SVOD growth that has captured the TV industry’s attention, and that of Hollywood. In June, nearly all outdoor advertising in the L.A. basin was from Netflix or Amazon Studios, if not for a premium cable TV network.
Among SVOD consumers in the U.S., in March 40% subscribed to only one service. Some 37% of respondents subscribed to two services, while 24% subscribed to three or more services.
This shows the increasing value to consumers of a Netflix-like service.
Millennial consumers, age 25 to 34, were the age demographic most likely to subscribe to three or more streaming video services (42%). But, year-over-year growth for this age demographic was flat.
Generation Z consumers, aged 18 to 24, who subscribed to three or more services actually declined by 5 percentage points, year over year, while Generation X, aged 45 to 55, grew 3 percentage points.
“As the technology gets older and less novel, as smart TVs become more common, and as more streaming content becomes available, older consumers with more disposable income are coming on board with streaming video services,” NPD President of Media Entertainment Ricardo Solar said. “Although Millennials were the first to adopt SVOD, GenX and Boomers are now driving the growth among those subscribing to multiple services.”
The findings come from “Entertainment Trends in America,” an NPD Group report originally distributed in March 2018. According to NPD Group, some 8,068 respondents participated in this year’s survey. This compares to 8,301 respondents in March 2017.