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With Video-On-Demand Services, Subscribers Find They’re Pleased with Their Choices

Increasingly, consumers are embracing “over-the-top” providers such as Netflix and Amazon Prime and they’re even choosing these services instead of traditional TV.

It’s Thursday night. The dinner dishes are washed and put away, the kids are in bed, and you’ve answered all of your work emails. It’s time to take it easy. A little TV would be nice. But what to watch? In the 1990’s, this was a simple decision: You’d tune in to Seinfeld on network TV.

Today, however, the choice isn’t as simple, partly because there is so much choice. The arrival of video-on-demand services has vastly expanded our entertainment options. And it’s not simply because there’s more to watch, there are also more options for where, when and how you watch as well. You may be able to catch Seinfeld in syndication on TBS, but to start an episode at a time most convenient for you, you must subscribe to Hulu, a video-on-demand service. What’s more, you can now choose to watch on your television set – or your desktop, laptop, tablet or smartphone.
Increasingly, consumers are embracing “over-the-top” providers such as Netflix and Amazon Prime – so-called because they deliver content over the internet without the need for a cable box or satellite TV service – and they’re even choosing these services instead of traditional TV. In fact, 86% of video-on-demand subscribers say they’re satisfied with their streaming service, according to a new survey by ReportLinker.


And although 63% of these subscribers still pay for cable or satellite TV, there’s a greater chance they’ll eventually cut the cord to traditional TV. This is especially true for Millennial video-on-demand subscribers, 51% of whom are cord-cutters, compared to just 30% of other generations.

As video-on-demand services transform the viewing landscape, here’s an in-depth look at what consumers think of these services and how their preferences are changing.

 

Millennials Embrace Video on Demand, But Other Generations Like It Too


Since Netflix launched its streaming service in 2007, it has been joined by some heavy-hitters, including Amazon and Hulu, seeking to capitalize on consumer viewing. Still, Netflix is by far the most popular video-on-demand service, with 64% of all US subscribers, according to ReportLinker. 
YouTube is a distance second with 12% of subscribers.

 Are you currently using an online video on demand platform ?

 

Half of those surveyed say they use a video-on-demand service, according to ReportLinker, and of these, 72% have a monthly subscription. Once subscribed, users tend to stick with the service. Fifty-seven percent have stayed with their service for more than two years, and Netflix users, in particular, are more loyal. Sixty-two percent say they are long-term subscribers.

One sign that video-on-demand services could eventually replace traditional TV services is that Millennials are embracing it more than older generations: 65% of Millennials say they use the services, compared to just 44% of other generations, ReportLinker said.

 

For how long have you been a user of video on demand streaming services ?

 

Viewing Preferences of VOD Users

Video-on-demand can be streamed on multiple devices. Television is the most popular device for viewing, receiving 77% of all mentions. But other laptops and smartphones also are widely used, with laptops cited 52% of the time, followed by smartphones with 49% of all mentions.

Again, there are generational differences. According to the survey, smartphones were mentioned most frequently by Millennials, with 64% of all mentions, followed by laptops, which received 61% of mentions. Tablets or desktops were cited most frequently by other generations.

Which devices do you use to watch video on demand services ?

 

Video-on-demand users also spend more time watching than non-users. On average, they spend 10.3 hours per week viewing movies or series, compared to just 9.3 hours for non-users, ReportLinker’s survey data shows.

Interestingly, VOD users show greater interest in transactional services, such as iTunes, than non-users. In the ReportLinker survey, 34% said they have purchased a single movie or TV show, compared to just 24% of non-users.

How many hours weekly do you watch VOD films or series ?

 

Cutting the Cord on Traditional TV

Video-on-demand services are an intriguing option for cord-cutters – those who have eschewed the traditional services in favor of video-on-demand services. The services are so inexpensive that users often subscribe to more than one at once. For example, 62% of Netflix subscribers said they also subscribed to YouTube, and 49% also subscribe to Amazon Prime, suggesting significant overlap.

And since more than half of Millennials are cord-cutters, it’s a worrisome trend for the traditional pay TV companies. Cable and satellite TV providers could lose up to $1 billion a year due to this practice, according to the Wall Street Journal.  

Cost is the top reason cord-cutters say they’re attracted to video-on-demand, the ReportLinker survey showed. Thirty-two percent say the low subscription cost is what attracted them to the service, compared to 6% of users who still pay for traditional TV. It’s easy to understand why. As the WSJ reported, the average cord-cutter saves $104 a month or 56% percent of their bill by dropping cable.

 

What was the main reason for choosing a video on demand streaming service ?

But subscribers are also attracted to a number of other features. Topping the list is access to an unlimited number of films or series, according to 25% of respondents to ReportLinker’s survey, followed by convenience (21%) and the wide selection of offerings (16%).

 

VOD Original Content Is a Competitive Advantage

New subscribers, however, present a challenge for video-on-demand services. According to the ReportLinker survey, one in five new users say they’re somewhat unsatisfied with their service, making it more likely they’ll switch to another VOD provider within the first six months.

 

To win new customers and retain existing subscribers, video-on-demand services need to differentiate themselves from their competition. Original content is viewed as the best way to do this. But customers have high expectations for quality, which is why both Netflix and Amazon Prime are investing billions of dollars to develop original programming.

And it seems to be working. More than 90% of video-on-demand subscribers say original content from their video-on-demand service is the same or better than the licensed content it offers. Even video-on-demand subscribers who also use transactional services, such as iTunes, think this is true: almost 50% believe video-on-demand original content is better.

 

Video on demand services : orignal content versus licensed content

 

Ultimately, video-on-demand services are a good deal for viewers. The content options have never been better, and subscribers have more choice about what to watch and when to watch it.

The question is no longer: “What’s on TV tonight?” It’s: “What do you want to watch?” With such high satisfaction rates and the support of Millennials, it seems likely video-on-demand services will continue to grow.

 

This survey conducted by ReportLinker reached 501 online respondents representative of the US population. Interviews were conducted on October, 1st.