Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Overview
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- Figure 1: Total US retail sales of digital video revenues, at current prices, 2013-18
- New arrivals to OTT need to stand out
- The issue: A competitive marketplace with clear frontrunners
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- Figure 2: Digital video subscriptions, August 2018
- The opportunity: Distinct offerings, new devices
- Make free services pay off
- The issue: Stiff competition from other media
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- Figure 3: Hardware used for online activities – Select items, December 2017
- The opportunity: An engaged audience on reliable platforms
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- Figure 4: Attitudes toward free video services, September 2018
- Break through the pay barrier
- The issue: Most people aren’t spending much
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- Figure 5: Digital video subscription spend, September 2018
- The opportunity: Identifying key spenders
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- Figure 6: Subscription saturation – Select items, by age, September 2018
- Attack the rental market
- The issue: Digital purchases dominated by Amazon
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- Figure 7: Digital video purchases, September 2018
- The opportunity: Easy distribution and cloud-based services
- What it means
The Market – What You Need to Know
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- OTT revenue bolsters digital video
- Lower spend in other categories is good news for digital
- Greater access at home and on the go
Market Segments
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- OTTs leading digital video into the future
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- Figure 8: Total US revenues from OTT services, at current prices, 2013-18
- Digital purchases keep immediate home entertainment relevant
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- Figure 9: Total US retail sales and rentals of home video – Digital and physical, at current prices, 2013-18
Market Perspective
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- Cords are getting cut quickly
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- Figure 10: Household cable TV subscriptions, April 2013-June 2018
- Digital ad spend continues to rise
- Media app adoption slower than more essential tasks
- Competing with gaming and other digital media
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- Figure 11: Online activities, December 2017
Market Factors
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- More people accessing the internet via mobile devices
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- Figure 12: Devices used to access the internet at home, April 2013-June 2018
- 5G to change wireless infrastructure
- Consolidating companies changing landscape
Key Players – What You Need to Know
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- A few leading the many
- Making it easy for viewers
- Avoiding harmful content
- New opportunities for built-in fans
Leading Players
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- Netflix
- Hulu
- Amazon Prime
- YouTube
- Sony Crackle
- Broadcast/cable online channels
What’s Working?
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- Three services dominating subscription market
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- Figure 13: Digital video subscriptions, August 2018
- Simplifying searches with user experience investments
- Partnerships to consolidate service offerings
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- Figure 14: Sprint and Hulu email ad, July 2018
- Figure 15: Roku and Amazon Prime Video email ad, October 2018
- Expanding content beyond scripted
What’s Struggling?
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- Finding a new audience
- Handling hate content
- Consistently responding to piracy
What’s Next?
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- Further merging of pay TV and digital video
- The entrance of big media
- Smaller channels entering streaming space
- Enhancing group viewing experiences
- Further utilization of content within platforms
The Consumer – What You Need to Know
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- Digital purchases booming as consumers look for early access to content
- Three in 10 subscribers spend less than $20 a month on subscriptions
- Adding services may not be feasible
- Partnering with free video content
- Satisfied but still room to improve
Digital Purchases
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- Key opportunity
- Digital still catching up to the physical
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- Figure 16: Content purchases, September 2018
- Amazon dominates digital purchases
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- Figure 17: Digital video purchases, September 2018
Subscription Spending
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- Key opportunity
- Small spend on subscription services is common
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- Figure 18: Digital video subscription spend, September 2018
- Subscriptions take up significant share of total video spend
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- Figure 19: Average subscription spend vs average total video spend, September 2018 and August 2017
- Finding the perfect age for more content
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- Figure 20: Average digital video subscription spend, by presence and age of children, September 2018
Saturation among Subscribers
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- Key opportunity
- Little interest in heavy subscribing among subscribers
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- Figure 21: Number of online movie/TV subscription services, September 2018
- Tepid interest in expanding streaming library
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- Figure 22: Subscription saturation, September 2018
- Young adults may not have the resources to add what they want
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- Figure 23: Subscription saturation – Select items, by age, September 2018
- Black, Hispanic viewers looking for more
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- Figure 24: Subscription saturation – Select items, by race and Hispanic origin, September 2018
Free Services
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- Key opportunity
- Free services allow ads to reach consumers
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- Figure 25: Attitudes toward free video services, September 2018
- Understanding key demos for content creators
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- Figure 26: Profile of content creators, by key demographics, September 2018
- Younger consumers browse with higher expectations
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- Figure 27: Perceptions of free content quality, September 2018
Attitudes toward Digital Video
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- Key opportunity
- Most viewers are content with current offerings
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- Figure 28: Satisfaction with available video content, September 2018
- Opportunities outside computer screens
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- Figure 29: Methods of watching online videos, September 2018
- Best opportunities for mobile reach among young adults, women
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- Figure 30: Mobile viewing of online videos, by gender and age, September 2018
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 31: Total US retail sales of digital video, at current prices, 2013-18
- Figure 32: Total US retail sales of digital video, by segment, at current prices, 2016 and 2018
- Figure 33: Total US OTT revenues, at inflation-adjusted prices, 2013-18
- Figure 34: Total US retail digital sales and rentals, at inflation-adjusted prices, 2013-18
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- Figure 35: Total US retail physical sales and rentals, at inflation-adjusted prices, 2013-18
- Figure 36: Types of apps used in last 30 days, April 2013-June 2018
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Appendix – Key Players
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- Figure 37: Teens’ use of online video services in last 30 days, April 2017-June 2018
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