Steady, 3-Year Average OTT Video Spend Not Market-Representative, Says Parks
Household spending on subscription over-the-top video services has held steady for three years, averaging just under $8 per month since 2016, reported Parks Associates Wednesday. Adoption of multiple services, or expensive services, by some consumers appears to be offset by…
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a large base of consumers who subscribe to one or two relatively inexpensive services, including 30 percent of consumers who don’t spend any money on OTT video services, it said. “The stability in average household spend belies the activity going on under the surface,” and that trend may end this year, said analyst Brett Sappington. Netflix, Hulu and Amazon continue to add subscribers, services such as ESPN Plus are also experiencing “phenomenal growth,” and Disney and AT&T's WarnerMedia plan to enter the fray this summer. Sappington sees three possible scenarios in the morphing market: More households become OTT streaming households, rival services begin to pull subscribers away from Netflix “or that spending number will go up.” The deluge of OTT platforms created more competition for video based on choice and content quality, but even as consumers spend more time viewing digital media, OTT platforms are experiencing a lag in customers’ insights, loyalty and revenue, said Barry Nolan, chief strategy officer, Swrve. OTT platforms need to deliver “the perfect message at the perfect time,” he said.