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Parks: Millennials Covet OTT Video — and Pay-TV

15 Jun, 2016 By: Erik Gruenwedel

Millennials, experts say, are increasingly shunning pay-TV in favor of over-the-top video and subscription streaming services. The trend has prompted major premium TV channels HBO, Showtime and Starz to launch standalone-streaming services.

Now, new data from Parks Associates suggests millennials — which number upwards of 15 million households — still subscribe to pay-TV. The research firm found that 61% of Millennials subscribe to both pay-TV and OTT services, which is higher than the national average of 52%.

“Younger consumers are willing to subscribe to pay-TV service, provided the offerings align with their expectations,” research analyst Ruby Ren Bond said in a statement. “In particular, Millennials show higher-than-average affinity for popular culture and premium movie channels as well as programming for younger children.”

Parks said nearly 60% of OTT video services in North America are subscription-based. About 64% of U.S. broadband households subscribe to an OTT video service, up from 59% in 2015. Average monthly spending on SVOD services among U.S. broadband households increased from $3.71 per month in 2012 to $6.19 per month in 2015.

Approximately 20% of U.S. broadband households canceled at least one OTT video service in 2015 — including 5% canceling Netflix, up from 4% canceling the service in the past 12 months.

Another 14% of broadband households subscribe to Hulu, while 7% of households canceled the service in 2015, roughly the same churn rate from Q2 2015. Parks said 24% of broadband households subscribed to Amazon Prime so that they could stream video. The churn rate for Prime Video declined slightly from Q2 2015 to the end of the year.

“OTT services are experimenting with a variety of models in order to differentiate and find their niche within the crowded North American market, which has over 130 active OTT video services,” Bond said. “Start-ups and incumbents alike are experimenting in balancing content offerings, content costs, revenue generation, and consumer appeal.”


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