Consumers Embracing SVoD Further, as they Delve Deeper into VoD Libraries

Entertainment Consumer Market Research and Commentary

SVoD has solidified its position as a clear consumer favourite in the entertainment landscape, as the pandemic has accelerated its adoption in 2020, building on already strong momentum. Futuresource Consulting’s latest Living With Digital survey provides further detail on the evolution of the overall VoD sector, which also shows a marked increase in transactional digital video uptake. Conducted with more than 20,000 respondents across the USA, Canada, UK, Germany, France, Italy, Spain, Sweden, Australia and Japan, this twentieth edition is the most comprehensive in the series so far, charting the evolution of entertainment consumption as societies continue to adapt to COVID-19 measures.

Comparing mid-2020 with the end of 2019, most countries in the study enjoyed a three to four percentage point increase in SVoD viewing, as a proportion of total video consumption. In the USA, SVoD now accounts for over one in every four viewing hours. And although SVoD continues to make inroads into older consumers’ leisure time, the increased consumption has largely been driven by those under 45 years of age. Alongside this growth in SVoD, many European markets have also witnessed an increase in free live TV consumption, accentuating its continued importance, particularly during times of uncertainty.

SVoD Service Stacking and Penetration on the Rise

“There’s no doubt that recently launched services like Disney+ have boosted both SVoD usage and uptake,” says David Sidebottom, Principal Analyst, Futuresource Consulting. “However, it is the growth of sector stalwarts Netflix and Amazon Prime Video which are driving the overall reach of SVoD. While these two established giants are responsible for most of the growth in the overall number of SVoD households, Disney+ is helping drive new levels of service stacking. Our research shows that over 90% of Disney+ subscribers are existing Netflix users, adding a new layer of growth to the SVoD environment.”

Transactional digital video has also witnessed an upsurge this year. In the USA, almost one third of respondents bought or rented a digital movie or TV show between the introduction of stay at home measures at the beginning of July, when the Futuresource survey was carried out. The results show that VoD rentals are back in focus, with three quarters of users renting a digital movie.

The Power of Nostalgia

While transactional digital video consumption was largely driven by existing users in all countries surveyed, up to 20% of those renting or buying digital movies were new or lapsed consumers. This re-emphasises how much consumer behaviour has changed due to prevailing market conditions, helping to broaden the reach of these categories.

With few new releases currently at theatres or on home video, consumers have also started to embrace library titles. Month-on-month catalogue sales continue to advance, and over 80% of digital movie renters or transactors paid for a title that was more than six months old during the lockdown period. Survey results also suggest that catalogue digital movie sales and rentals were typically driven by emotive impulses, such as wanting to watch an old-time favourite or a feel-good movie, either to provide escapism or just for pure nostalgia.

Proceeding with Caution

“The industry must now turn to strategies that keep consumers engaged across both SVoD and transactional digital video,” says Sidebottom. “From here on into 2021, it’s all about maintaining the momentum that has been borne from lockdown and social distancing measures.”

Despite the increased uptake and consumption of paid-for digital video due to stay at home measures, the survey also strikes a cautionary note. Up to 59% of respondents believe they will be worse off in the future due to COVID-19. This was highest in Italy. In most of the other countries the figure was between 40% and 50%. The next wave of the bi-annual survey, to be published in early 2021, will track these sentiments, in particular how they relate to digital video consumption as we move into 2021.

Futuresource’s Living With Digital consumer research program has been running for 12 years, the latest wave was conducted with 2,000 respondents each in the USA, Canada, UK, Germany, France, Italy, Spain, Sweden, Australia and Japan. For more details of this and the upcoming survey, contact Kailash Morjaria at kailash.morjaria@futuresource-hq.com

About the author

David Sidebottom

David is a Principal Analyst – Media and Entertainment. David has over 20 years’ experience in a research and consultancy environment and is closely involved in researching, analysing and consulting on key content industry and consumer technology developments worldwide, with a particular focus on the evolution of digital business models in the TV, video and music industry. David works with a wide variety of high profile Futuresource clients across the content ecosystem including studios, broadcasters, technology companies, hardware vendors, service providers and industry associations. He also directs Futuresource’s long-running global consumer panel ‘Living with Digital’.