Chicago (February 27, 2014)—As popular original programming such as Orange is the New Black and House of Cards continue to surge in popularity and make their case for compulsory binge-watching, new Mintel research suggests that the streaming media boom for television and movies is only just beginning. Nearly half of all online adults (46%) in the US watched video content in the past month using a subscription video account, increasing to 71% of all 18-34s. Furthermore, with sales increasing roughly 25% in each year from 2011-13, resulting in a total increase in sales of $1.2 billion in 2013, Mintel forecasts that total sales will reach over $16.7 billion by 2018 as consumers shift away from physical discs and continue to seek out unique content. While today, some 41% of respondents to Mintel’s survey are only willing to watch TV shows or movies online if they are provided free of charge, it does highlight that 59% of respondents are open to paying for the online content. Similarly, only a quarter (24%) of respondents prefer to sit through commercials in order to view content for free, suggesting that three quarters, when given the option, will prefer to pay to watch content instead of having commercial interruptions. “Virtually every large cable company, telco, or hardware and software brand is joining the streaming video market and we’re seeing big deals being put on the table to enhance viewers’ experiences,” notes Billy Hulkower, senior technology analyst at Mintel. “While copycat services might ordinarily be seen as lacking in points of differentiation, in the case of streaming video services, the elements of service are so few that each service will end up carrying each feature of its competitors, or fall by the wayside. Alternatively, brands can aim for differentiation via original content or via specializing in a specific genre.” Multiple leading providers consider original content a chief means to establishing their brand: Netflix has already produced about 20 distinct pieces of original programming, including television series, movies, documentaries, and stand-up comedy performances. Eleven new television series are in development, set to air in 2014 or 2015. Hulu aired 20 original exclusive series in 2013, and has 40 additional series in development. Amazon Instant Video is offering original TV programming as of November 2013, including the shows Alpha House and Betas. Netflix is the clear leader for subscription usage, with about a quarter of all US households carrying a Netflix subscription. In Mintel’s survey, 36% of all adults had used it in the past month, more than three times the usage of the nearest competitor. “Original content may be the most important means of differentiation between services, but it is a costly means of establishing a brand name,” continues Billy. “For subscription services, the ideal amount of content is just enough to encourage continued membership – 20 new series on the horizon may not be necessary, unless most of these target different demographic groups. The strategy followed by HBO in the 1990s presents perhaps the best model for streaming subscriptions – producing a small number of high-concept, high-production-value series and special events. Brands that do not feel comfortable supporting their service with original programming should be angling for partnerships, particularly if each brand can bring a key element of service, with leaders in digital distribution collaborating with leaders in original content.” A cheaper route to differentiation might be through specializing in a specific genre or focusing on a particular demographic. For example, a service might excel in classic films, foreign films, horror films, or dark comedies, or other commonly sought-after movie and television segments. These segments could even be sold as individual subscriptions, with a lower price tag (eg $5/month) than current monthly subscriptions ($8/month),” Billy adds. Other demographics that show higher levels of penetration and consumption include men and respondents from households with children. Among those who do view streaming video, men tend to consume more – 27% of men watch a program nearly daily, as compared to 19% of women. In addition, 55% of households with children either rented or purchased a digital movie or TV show in the past month, whereas only 20% of those without children did so. It would be reasonable for content producers to ask for a higher fee for content that is male-oriented or kid-friendly, and reasonable for distributors to pay more for it. You might also be interested in: No related posts.