Netflix rules roost in OTT but has room for improvement

Netflix rules roost in OTT but has room for improvement


   Michelle Clancy
   | 06 June 2016






Netflix Orange is the New BlackWhen it comes to over-the-top (OTT) services, Netflix has the largest audience base and viewing duration and tends to outperform other streaming services in factors important to streamers.

netflixBut according to research firm Gfk, there is room for improvement as the service does underperform in some factors – mainly current TV seasons and new movies. The sky is not the limit for subscription fees, either. The firm found that Netflix, Amazon Prime and Hulu are priced close to the maximum that users would pay ($10-$11 per month).



Consumers still love OTT though, with linear TV falling in preference as OTT uptake continues. Users of streaming services ranked linear TV as only the second or third choice for viewing TV/movies – a flip from 2014, when linear TV still ranked as their first choice.

As a result, streaming services have launched into the market in droves, but the firm suggests that this could be too much of a good thing. Almost half of regular streamers feel there are too many streaming services and apps to keep track of. Perhaps related to this, 81% of streamers want at least some curation to make navigating their streaming services easier, up from 68% in 2014. This may indicate consumer interest in bundlers or aggregators that will make their streaming life easier.

The results dovetail with research from Strategy Analytics, which recently described the ascendency of streaming video in the US while noting that Ultra HD is indeed the next new kid on the block.

In two simultaneously announced reports, the analyst has revealed the first indicators that the US video streaming market is approaching saturation and has also predicted that more than 11 million North American homes will own an Ultra HD TV by the end of 2016 as prices drop to increasingly affordable levels.

With regard to the former, Strategy Analytics forecasts that US consumers will spend $6.62 billion on video streaming services such as Netflix, Amazon Prime and Hulu in 2016. The 22% increase in streaming subscription revenue means the format will account for over a third of US consumer spend on home video in 2016. Even though this represents a $1.19 billion (or 22%) increase on 2015, the analyst notes that it’s the first time ever that the absolute increase in the amount people spend on such services will be lower than the previous year’s increase. For 2015 the increase was $1.21 billion.