Netflix growth continues as Amazon Prime Video momentum buildsWednesday, August 24th, 2016
Living with Digital Consumer Study
Futuresource Consulting has published the 12th wave of its ‘Living With Digital’ consumer survey, which reveals the latest trends in digital entertainment, with a focus on the US, UK, France and Germany but has now expanded to cover Italy, Spain, Australia, Canada, as well as Japan, South Korea and China. It explores topics which highlight consumer preferences for digital video format adoption, influences affecting purchasing decisions and connected device adoption. Also included is an ongoing narrative around Pay-TV cord-cutting and the multinational competitive situation between Netflix and Amazon Prime Video.
The report highlights the continued growth in subscription video on demand (SVoD) users, amongst both Netflix and Amazon Prime Video, in addition to the rafter of local competitors. There is also encouragement from the growing base of transactional digital video consumers and digital media adaptor owners, together with details on the continued but steady shift away from scheduled TV viewing to non-linear content consumption.
The study highlights that multiple online subscription uptake continues to rise compared with results from the previous wave of research. However, there is high overlap between Netflix and other leading SVoD services in each country, particularly Amazon Prime Video in the USA, UK and Germany. Approximately half of Netflix subscribers also use Amazon Prime Video in the UK and USA, with 30% of US respondents now using both Amazon Prime Video and Netflix.
“Netflix uptake continues to grow in all countries and although satisfaction levels for Netflix are high, they do vary considerably by country” commented David Sidebottom, Principal Analyst, Media and Entertainment at Futuresource Consulting. “Over half of US respondents say they are extremely satisfied with Netflix, 83% are satisfied or very satisfied; this falls to around two-thirds in France and Germany.”
The survey also investigated genre preferences in a number of ways, highlighting that comedy movies are the most popular genre amongst Netflix subscribers, justifying Netflix’s investment in this content type.
The strong momentum on Amazon Prime, particularly in the USA, UK and Germany, has seen overall Prime subscriptions reach around one-third of Amazon account holders in the UK and almost 60% in the USA, with around two-thirds of total Amazon Prime members watching Amazon Prime Video at least once a week.
Another notable service is the Sky ‘Buy & Keep’ offering in the UK, an electronic sell through service (EST) which has attracted significant attention worldwide, partly as it provides a DVD through the post as well as making the title available instantly via the consumer’s Sky set-top-box. Usage has grown to 21% of Sky subscribers from 16% in the previous wave (end 2015).
Overall the research reveals that the number of consumers using transactional digital video has grown in all countries after lacklustre results from the previous wave, with a notable improvement in both the UK and USA, where 25% and 41% of total respondents now buy some form of transaction digital video. Futuresource states that the increase in the number of consumers buying Electronic Sell-Through (EST) titles has been a key driver of this overall growth, particularly in the UK and US, as the behaviour becomes mass market. The vast majority of these still buy packaged video, with still only 4% of video buyers just buying EST and not packaged video.
As well as further investigation into content and genre preferences, the survey also highlights reasons why consumers are purchasing digital content e.g. why consumers buy EST movies or sign up to Netflix, in addition to why non-users do not, helping identify what obstacles need to be overcome and what can encourage further uptake, such as release windows, price and range of content. Below, Futuresource has put together an infographic which highlights the some of the key key trends from the study.