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Study: OTT, VOD Services Continue To Co-Exist

1/28/2014 09:27:00 AM Eastern

New York, NY – Over-the-top streaming TV services like Netflix, Hulu+ and Amazon Prime are becoming popular but show no immediate threat to more traditional video-on-demand (VOD) offerings from pay-TV providers, a new study from GfK Media showed Tuesday.

David Tice, GfK’s media and entertainment senior VP, who will be presenting highlights from the study at Thursday’s IIR Media Insights and Engagement Conference in Miami, Florida, said that 56 percent of consumers in homes with cable, satellite, or telco TV service now use VOD or a “TV Everywhere”-type offering from their TV provider.

By contrast, 41 percent of the same group said they use a subscription streaming service.

In terms of customer satisfaction, however, streaming services are the clear favorite, rated “better” than VOD by 44 percent of those who use both; by comparison, 27 percent prefer VOD, and 29 percent say the two are equal.

The silver lining for TV service providers was that those who use VOD more often like it much better.

Among users of both service types who turn to VOD at least once a week, on-demand becomes the favorite – preferred by 43 percent, versus 30 percent for streaming services.

“Pay-TV providers are getting sampling for their VOD services – but they need to gain repeat users to start winning the perception battle,” said Tice in a statement. “Consumers are open to considering alternatives to Netflix; but a lack of education and of effective marketing are letting these key pay-TV assets languish in the shadows.”

Similarly, perceptions of the “variety and choice” of programming available via VOD are dramatically more favorable among those who use it more frequently.

Among the once-a-week-plus user group, VOD is perceived as essentially equal to Netflix and similar services in terms of viewing choices; 57 percent cited VOD as having “excellent” or “very good” variety, versus 55 percent for paid streaming.

But those who use VOD less than once a week see the streaming services as highly superior in choice – 67 percent versus 28 percent.

In contrast, TV Everywhere services are having a notable and growing impact on subscriber churn for pay TV providers, the study found.

Among users of TV Everywhere in pay-TV homes, 28 percent feel more satisfied with their pay-TV service (up from 24 percent last year), and 33 percent are less likely to change pay-TV providers (up from 25 percent last year).

This positive assessment is even more striking among those who are users of subscription streaming services – a group considered more at risk of becoming “cord-cutters.”

Over one-third (35 percent) are more satisfied with their pay-TV service, and 39 percent said they are less likely to change providers.

The full study, titled: “How People Use Media: TV Everywhere/VOD,” is available now from GfK’s Media and Entertainment.

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