In demand: On demand services

Russell FeldmanDirector of Digital, Media and Technology
September 30, 2016, 11:48 AM UTC

YouGov recently undertook a study in the UK to understand current behaviours of consumers with regards to television and movie streaming subscription services.

The purpose of the study was to understand consumer attitudes towards what we call subscription video-on-demand (SVOD) services (non-jargon that’s the likes of Netflix, Amazon Prime Instant Video, Now TV etc. to you and me). The project focused on why people use these services, how they may switch between them, and the impact of using them on traditional television services such as a Sky or Virgin Media subscription.

We spoke to 2,000 respondents in total. 1,000 of which were representative of the UK population. The second sample of 1,000 were with a representative sample of SVOD customers.

We found that 32% of the UK adult population have an SVOD service. Based upon 51 million adults in the UK, this accounts for over 16 million people! Amongst these users, almost half (43%) are millennials aged between 18-34 year olds. That’s a whopping 6.88 million 18-34s.

Amongst the main service in use, Netflix has the largest customer base with 63% of the market using them. Amazon Prime Instant Video has a 23% share with Now TV at 9%. Interestingly a huge 39% of SVOD users have access to more than one service, and we are seeing a large cross-over between Netflix and Amazon Prime Instant Video.

We found that different services were attractive for different reasons, however one of the main reasons was the exclusive and original content offered by each provider. Content such as House of Cards or Breaking Bad resonated well with Netflix customers, whilst Amazon Prime Instant Video has content such as Mr Robot or Ripper Street, and Now TV being part of Sky is able to show box sets from Sky Atlantic such as Game of Thrones, 24, and True Detective, all of which have been popular with users.

Focusing on the exclusive content offered, 9 in 10 Netflix customers were aware of at least 1 exclusive or original programme to it, in comparison this dropped to 78% of Amazon Prime Instant Video customers. Interestingly whilst customers can name a programme, Netlfix customers were considerably more likely to say they have been attracted by the exclusive content than Amazon Prime Instant Video customers. Netflix has done a fantastic job of promoting its exclusive content to the masses with both television and digital advertising campaigns. Of these shows, over half (51%) of Netflix customers have seen Breaking Bad, just under half (48%) have seen Orange is the New Black, and 38% House of Cards.

Whilst this is all very positive for Netflix, the market is still young and is moving forward at a tremendous pace. 9% of those not using SVOD services are keen to use one in the next 12 months. However, 21% of all current SVOD customers have stopped using a service in the past 12 months too or switched to another. Looking at the movements of customers it is clear that Amazon Prime Instant Video is in the driving seat. It is capturing customers of rival services, and attracting those in the market for a service more than its rivals.

Why is this? It’s not just exclusive content that it already has that is appealing to customers but new content and large coupes. The Grand Tour begins in earnest next month with the ex-Top Gear mob of Clarkson, Hammond and May and Amazon has promoted this across other related services such as its Fire TV Stick. However the other Amazon services also provide a segway in for Amazon customers. Many have an Amazon account, and Amazon is not just a content provider. It is a retailer, a music supplier, and device manufacturer. It has many strings to its bow which puts many consumers into its ecosystem.