COVID-19 will drive greater usage of TVOD services in 2020

Thursday, May 7th, 2020
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OTT Video Market Tracker analyzes impact of new and existing video services in OTT space

Parks Associates, ahead of the release of COVID-19 Impact on Communications and Entertainment, predicts consumer usage of TVOD (transactional video on-demand) service will increase significantly in 2020. The firm’s OTT Video Market Tracker reports that in Q1 2020, 14% of US broadband households had used a TVOD service over the past 30 days, a five-point increase from the previous year. This service type, which includes Amazon Prime Video, FandangoNOW, and VUDU, will spike as more content moves online, including early access to theatrical releases such as Trolls World Tour or The Invisible Man.

OTT Service use by business model - past 30 days - 1Q 2020 - U.S. Broadband Households

“The idea of streaming current in-theater films was once a concept from a proposed streaming service called The Screening Room,” said Steve Nason, Research Director, Parks Associates. “This service never officially launched, but the COVID-19 pandemic has pushed the concept behind it into reality. Many steps in content windowing were narrowing already, but the current shelter-in-place orders pushed the digital distribution of new theatrical content to the front to offset the lost revenue from closed movie theaters.”

Parks Associates notes that Disney fast-tracked the release of blockbuster titles through its SVOD service Disney+. The company released Frozen II three months before its original planned release and added Onward to the streaming service much quicker than previously anticipated. Parks Associates notes that Disney and other studios are continuing to weigh if they should release new theatrical titles straight to VOD platforms and services or push back these titles so they can premiere in theaters as originally intended, when COVID-19 restrictions are lifted.

“By moving more prime content online earlier, studios also increase the risk of piracy for their top-dollar assets,” Nason said. “Early window content has always been a target among pirates, but they’ve had to sneak cameras into theaters and bootleg low-quality recordings. Now, with releases going digital, pirated video will be higher quality, while consumers might feel emboldened to tap into pirated video since theaters are closed. This will put more pressure on the antipiracy efforts among video content and service providers.”

Parks Associates has multiple deliverables covering the OTT and pay-TV market space:

  • OTT Video Market Tracker: 25% of US broadband households recently used a free ad-based OTT service
  • Adoption and Consumer Habits for vMVPD Services: Online pay-TV services have significantly higher Net Promoter Scores (NPS) than traditional pay-TV services
  • Today’s Broadcast TV: TV antenna penetration has grown 67% in the last year