Report: SVOD to Reach 38% of U.K. Video Market by 20196 Apr, 2015 By: Erik Gruenwedel
Consumer spending on subscription streaming video in the United Kingdom is expected to surpass £1.1 billion ($1.7 billion) by 2019 — up 168% from an estimated £437 million ($650 million) in 2014, according to a new report.
The SVOD market in the U.K., which includes Netflix and Amazon Prime Instant Video, accounted for 20% of the video market in 2014, according to research firm Mintel. The U.K. home video market is the third largest in the world behind the United States and Japan.
“As more consumers acquire connected devices such as smart TVs, which allow them to stream films and TV programs directly, more people will pick digital sources over physical formats such as DVD and Blu-ray Disc,” Paul Davies, senior leisure and technology analyst at Mintel, said in a statement.
Indeed, nearly 70% of Brits have streamed online videos in the last 12 months, with 32% of this group using a SVOD service. Interestingly, youth is served with OTT video as 91% of users from 16-24 years of age accessed a video streaming service in the past 12 months.
Hybrid Video-Music Streaming
As more British consumers gravitate toward digital consumption of video entertainment, there is similar interest for streamed music, according to Mintel. The analyst contends there is a market to combine music and video subscription streaming as 41% of online music subscribers and 33% of online video subscribers said they would be interested in a subscription package that included a bundle of different media services.
“Video streaming services have enjoyed more success than music services when it comes to converting people into paid users. Within the music sector, the incentive to upgrade users to paid services is not just about increased revenue, but also about easing tensions with artists,” Davis said.
The analyst said cross-usage between music and video streaming services is high, underscoring the potential for bundled packages offering better value and deliver better integration.
Finally, Mintel found that U.K. consumers like to explore content libraries themselves to find new music or video online, with 50% of users saying that they would rather do this than receive recommendations from providers. As many as one in four (39%) consumers who have streamed music or video say they often find that content recommendations from services do not fit their interests. Meanwhile, almost one in three (31%) users of music and or video streaming services would like to see content recommendations from their friends appear on sites.