Netflix Still Atop Burgeoning OTT Video Market31 Jul, 2015 By: Erik Gruenwedel
2015 may be the year over-the-top video went viral with launches of HBO Now, Dish Network’s Sling TV, Viacom’s Noggin, Shout! TV, Showtime All Access and Sony’s PlayStation Vue, among others.
With media companies set to release fiscal results over the next few weeks, Wall Street interest in the success of OTT video (relative to Netflix, Hulu Plus and Amazon Prime Instant Video) is at the forefront.
That said, market pioneer Netflix, which created the subscription streaming business model in 2008, remains firmly atop the OTT food chain, according to MoffettNathanson analyst Michael Nathanson.
Using third-party app data (from Sensor Tower) and focusing on Apple users (HBO Now bowed exclusively on iOS), Nathanson estimates HBO Now to have between 970,000 to 1.9 million subscribers since launching in April. Viacom’s kid-centric Noggin SVOD service has between 162,000 to 324,000 subs since launching in March, and Sling TV has from 103,000 to 207,000 subs since February.
While the initial HBO Now sub numbers could be misleading due to the free 30-day trial offer, Nathanson believes the launch was a success. HBO Now iOS downloads (streaming) reached 1.1 million in April, about two-thirds of Netflix’s 1.7 million iOS net new subs. The numbers dropped to 460,000 and 350,000 in May and June, respectively, which represents 22% and 14% the size of Netflix downloads in those months. For its first full quarter, HBO Now tallied 1.9 million iOS downloads, according to the analyst.
Notably, Nathanson believes Netflix’s high (7x) ratio of streaming (downloads) vs. new subscribers underscores the prevalence of multiple users per household and sharing of passwords, among other factors.
By comparison, Noggin and Sling TV — relative to Netflix — generated iOS downloads of 3% and 1%, respectively.
Indeed, Noggin launched with 164,000 iOS downloads in March in the U.S. and dropped down to 60,000 in April and 35,000 in May. June numbers showed meaningful acceleration to 65,000 to bring the 2Q 2015 total to 160,000.
According to Nathanson, Sling TV did not experience the same initial sub spike at launch as other apps, with only 48,000 iOS downloads in February. Regardless, the online TV service has seen stable monthly downloads from 34,000 and 50,000. This has led to cumulative iOS downloads to date of 207,000, according to the analyst.