A new report from comScore looks to explain the expansion of the over-the-top (OTT) content market. While also highlighting that in spite of Netflix remaining the overall single biggest OTA service, it is starting to face some stiff competition - due to the OTT expansion in general, coupled with a larger number of TV users turning to OTT services. In terms of the overall OTA landscape, comScore notes that as of December 2016, 53-percent of Wi-Fi connected homes in the US (49 million) made use of at least one OTT service. With actual activity levels for those homes noted as 2.2 hours per day on average, and 19 days per month. This alone highlights that while OTT services have yet to replace traditional TV services, they are starting to find their place as a complement to TV services.
Moving to Netflix specifically, and while the service still seems to command the lion’s share - with comScore noting that as of December 2016, 75-percent of those Wi-Fi connected homes accessed (or had access to) Netflix - other companies are starting to make their own impact on the ever-growing OTT market. For instance, (and in contrast to Netflix’s 75-percent), comScore notes that during December 2016, YouTube’s Wi-Fi connected home reach was 53-percent, Amazon Video’s reach was 33-percent, and Hulu’s reach was 17-percent. Which is likely significantly different to how the landscape looked at this time last year, where the gap between Netflix and the rest was significantly greater.
Of course, it could be argued that the reach of the likes of YouTube or Hulu does not necessarily matter, as long as Netflix maintains its reach. Although, comScore specifically addresses this point by drawing attention to the OTT market in the absence of Netflix. Noting that while YouTube’s reach was 53-percent, over 30-percent of that 53-percent did not engage with Netflix at all (at least not through a TV). The same can be said for Amazon Video, where almost 25-percent of its 33-percent reach was not Netflix users. Even more interestingly, is the observation made on hours watched. On this point, while Netflix on average accounted for 28 hours of viewing time per month, per home, Sling TV was noted accumulating 47 viewing hours per month, per home. Which is of particular importance as Sling TV’s reach was significantly lower than the reach of Netflix. Resulting in an overall higher engagement-to-reach ratio. The inference being that if Sling TV was to continue to expand its reach, while maintaining its higher average monthly viewing hours, it could prove to be another issue for Netflix. Especially considering that Sling TV is more of an MVPD, then a singular content provider like Netflix, and therefore has the ability to offer more value to customers, and in particular those looking to 'cut the cord'.
In either case, the takeaway from these latest findings is that the OTT market is one which is growing steadily and is starting to make more of an impact on US viewing habits. For instance, while the battle between the likes of Amazon, Hulu, Netflix, Sling TV, and YouTube, will continue and narrow, comScore notes that there are now no less than 11 OTT services, which can each claim a monthly average reach of more than one million homes in the US.