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NPD: Subscription Streaming Dominates Digital Transactions

20 Jan, 2014 By: Erik Gruenwedel

Cord cutting/shaving may be in the eyes of the beholder, but subscription streaming of movies and TV shows is real and growing, according to new data from The NPD Group.

There was a six percentage point overall decline in U.S. households subscribing to premium TV channels such as HBO and Showtime over the past two years, while households subscribing to SVOD such as Netflix, Amazon Prime Instant Video and Hulu Plus grew four points.

According to NPD, 32% of U.S. households were subscribed to premium TV channels in August 2013, compared with 27% of U.S. households that subscribed to SVOD services. Netflix remains the clear leader in SVOD; however, Hulu Plus and Amazon Prime are reaping the biggest growth benefits in the category, as consumers tack on secondary SVOD services.

Overall digital-video transactions rose three percentage points since 2012, reaching 70% of all home video transactions in 2013. It should be noted that NPD counts home video transactions as purchases and individual paid rentals, not including free on-demand movies and TV shows included with a pay-TV subscription. In 2013 SVOD made up 71% of all digital-video transactions, and it continued to grow faster than all other digital acquisition types.

“As SVOD services have gained momentum, it’s clear that some consumers are trimming their premium TV subscriptions,” Russ Crupnick, SVP of industry analysis with NPD, said in a statement. “As SVOD increasingly strives to become a channel itself, viewers might consider it to be an adequate substitution for other premium channels, or perhaps they are switching to economize on their time and money spent.”

Netflix reports fourth-quarter financials Jan. 22.

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