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More Than Half Of U.S. Households Subscribe To An OTT TV Streaming Service

Niche services gaining some momentum 7/12/2017 10:45:00 AM Eastern

Parks Associates revealed today that 59 percent of U.S. broadband households subscribe to an over-the-top (OTT) streaming service such as Netflix, Amazon or Hulu.

The firm's OTT Video Market Tracker service notes that only 6 percent of U.S. broadband households subscribe to any other OTT service without also having a subscription to one of the top three services, while 3 percent subscribe to one or more sports OTT video service, including MLB.TV, NFL Game Pass, NBA League Pass or WWE Network.

But that trend is developing.

"U.S. consumers are not taking solely a Netflix, Amazon or Hulu subscription. Many are shopping around and trialing new services to get access to interesting content unavailable through the big services," said Brett Sappington, Parks’ senior research director. "Interest and viewership in OTT video services have led to an increase in total subscriptions since 2015, including an increase in households subscribing to two, three, or even four or more services. All this translates into more money being spent by consumers and more opportunity for niche content services to capture revenues."

Parks Associates notes that niche services like Japanese anime provider Crunchyroll and the WWE Network are examples of smaller enterprises that have grown strong customer bases while remaining unique from industry giants such as Netflix, Amazon and Hulu. Crunchyroll reported more than 1 million global subscribers as of February 2017, while WWE Network had 1.95 million global subscribers following WrestleMania 33 in April.

"Crunchyroll is a great example of a niche OTT video service that understands effective niche-oriented competition," Sappington said. "They understand their target segment extremely well, and they have crafted an experience that caters to that audience, including forums and events to foster a user community."

According to the OTT Video Market Tracker, 65 percent of U.S. broadband households subscribe to at least one OTT video service. However, the firm notes that household penetration is slowing and that growth areas are in multi-subscription households and older consumers adopting services.

"One-third of broadband households subscribe to multiple OTT services," said Parks senior analyst Glenn Hower. "With competition set to intensify, services will begin to focus on niche segments beyond young consumers, offering unique content and services in order to capture any remaining untapped portions of the market."

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