Parks PointsWill COVID-19 Drive OTT Subscriptions?
by
Steve Nason |
The COVID-19 crisis has fundamentally impacted the daily operations and strategies of companies across all business verticals and the lifestyles and routines of consumers. The dynamic changes currently developing in the OTT video space, for both the industry and consumer side alike, are illustrative of the profound effect the crisis is having on daily life. Parks Associates monitors and analyzes the OTT video space for our OTT Video Market Tracker, along with multiple other deliverables, and we have witnessed many interesting trends emerging in the OTT space:
Consumers, on the other hand, are watching video content through a variety of methods and providers, including OTT at historic levels. As Parks Associates data from March 2020 shows:
OTT service providers are tapping into the captive at-home video consumer base brought on by shelter-in-place orders and work-at-home mandates. The combination of free content, promotional offers, extended free trials, and early access to blockbuster theatrical releases will undoubtedly drive up OTT video consumption and engagement to unprecedented levels. But, the critical question remains, will this unparalleled level of consumption and engagement lead to paid subscriptions? If the video consumption patterns we are seeing appeared in a vacuum without other significant contributing factors, the answer would certainly be “yes.” But this activity is happening against a backdrop of personal health and safety fears and severe economic impact brought on by skyrocketing unemployment, furloughs, and pay reductions. Consumers are examining their personal finances as never before to determine what they can afford to buy and weigh what products and services provide the most value to their household. Household prioritization of paid entertainment services against other household services and product needs will determine if a free trial, promotional offer, or an exclusive piece of content converts to a paid subscription. The opportunity is there for OTT services to convert engaged consumers like never before. The data suggests we are seeing an uptick in subscriptions during the early phases of the pandemic. In order to convert viewers to subscribers, OTT services must continually engage these new users – understand their unique viewing patterns and reach out to them proactively to understand drivers and triggers to retain them. Parks Associates is tracking the impact of the COVID-19 crisis on the video services space. Results from Parks Associates’ March 2020 survey are forthcoming in COVID-19: Impact on Consumer Behavior and Spending. Results from Parks Associates April 2020 survey will dive deeper into consumer engagement with pay-TV and OTT video services, including new subscriptions to and cancellations of leading services, available in the forthcoming COVID-19: Impact on Communications and Entertainment For a deeper look at the OTT video space, please check out the Parks Associates’ 360 Deep Dive: Adoption and Consumer Habits for vMVPD Services and the 360 Deep Dive: Adoption and Business Models: Video, Music, and News Services.
Steve NasonResearch Director INDUSTRY EXPERTISE: Entertainment content and services, consumer behavior on emerging technology markets Steve is a research director at Parks Associates, specializing in entertainment content and services. He brings over fifteen years experience in a variety of market research and marketing strategy roles including several in the emerging technology and media space. Steve earned both his BS in Telecommunication with a concentration in Business and his MA in Mass Communications from the University of Florida. |