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Digital Video - US - November 2018

"As new players enter the streaming market and established names invest in unique consumer experiences, digital video platforms are staking their claim in a crowded media landscape. The domination of a few key players and increasing consumer interest have bolstered revenue, but made it difficult for new entrants to convince users to add more subscriptions. Offering new features and compelling content to entice current audiences to upgrade will be important to the sustained growth of digital video destinations."

- John Poelking, Leisure & Media Analyst

This report will look at the following areas:

  • New arrivals to OTT need to stand out
  • Make free services pay off
  • Break through the pay barrier
  • Attack the rental market

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • Figure 1: Total US retail sales of digital video revenues, at current prices, 2013-18
        • New arrivals to OTT need to stand out
          • The issue: A competitive marketplace with clear frontrunners
            • Figure 2: Digital video subscriptions, August 2018
          • The opportunity: Distinct offerings, new devices
            • Make free services pay off
              • The issue: Stiff competition from other media
                • Figure 3: Hardware used for online activities – Select items, December 2017
              • The opportunity: An engaged audience on reliable platforms
                • Figure 4: Attitudes toward free video services, September 2018
              • Break through the pay barrier
                • The issue: Most people aren’t spending much
                  • Figure 5: Digital video subscription spend, September 2018
                • The opportunity: Identifying key spenders
                  • Figure 6: Subscription saturation – Select items, by age, September 2018
                • Attack the rental market
                  • The issue: Digital purchases dominated by Amazon
                    • Figure 7: Digital video purchases, September 2018
                  • The opportunity: Easy distribution and cloud-based services
                    • What it means
                    • The Market – What You Need to Know

                      • OTT revenue bolsters digital video
                        • Lower spend in other categories is good news for digital
                          • Greater access at home and on the go
                          • Market Segments

                              • OTTs leading digital video into the future
                                • Figure 8: Total US revenues from OTT services, at current prices, 2013-18
                              • Digital purchases keep immediate home entertainment relevant
                                • Figure 9: Total US retail sales and rentals of home video – Digital and physical, at current prices, 2013-18
                            • Market Perspective

                              • Cords are getting cut quickly
                                • Figure 10: Household cable TV subscriptions, April 2013-June 2018
                              • Digital ad spend continues to rise
                                • Media app adoption slower than more essential tasks
                                  • Competing with gaming and other digital media
                                    • Figure 11: Online activities, December 2017
                                • Market Factors

                                  • More people accessing the internet via mobile devices
                                    • Figure 12: Devices used to access the internet at home, April 2013-June 2018
                                  • 5G to change wireless infrastructure
                                    • Consolidating companies changing landscape
                                    • Key Players – What You Need to Know

                                      • A few leading the many
                                        • Making it easy for viewers
                                          • Avoiding harmful content
                                            • New opportunities for built-in fans
                                            • Leading Players

                                              • Netflix
                                                • Hulu
                                                  • Amazon Prime
                                                    • YouTube
                                                      • Sony Crackle
                                                        • Broadcast/cable online channels
                                                        • What’s Working?

                                                          • Three services dominating subscription market
                                                            • Figure 13: Digital video subscriptions, August 2018
                                                          • Simplifying searches with user experience investments
                                                            • Partnerships to consolidate service offerings
                                                              • Figure 14: Sprint and Hulu email ad, July 2018
                                                              • Figure 15: Roku and Amazon Prime Video email ad, October 2018
                                                            • Expanding content beyond scripted
                                                            • What’s Struggling?

                                                              • Finding a new audience
                                                                • Handling hate content
                                                                  • Consistently responding to piracy
                                                                  • What’s Next?

                                                                    • Further merging of pay TV and digital video
                                                                      • The entrance of big media
                                                                        • Smaller channels entering streaming space
                                                                          • Enhancing group viewing experiences
                                                                            • Further utilization of content within platforms
                                                                            • The Consumer – What You Need to Know

                                                                              • Digital purchases booming as consumers look for early access to content
                                                                                • Three in 10 subscribers spend less than $20 a month on subscriptions
                                                                                  • Adding services may not be feasible
                                                                                    • Partnering with free video content
                                                                                      • Satisfied but still room to improve
                                                                                      • Digital Purchases

                                                                                        • Key opportunity
                                                                                          • Digital still catching up to the physical
                                                                                            • Figure 16: Content purchases, September 2018
                                                                                          • Amazon dominates digital purchases
                                                                                            • Figure 17: Digital video purchases, September 2018
                                                                                        • Subscription Spending

                                                                                          • Key opportunity
                                                                                            • Small spend on subscription services is common
                                                                                              • Figure 18: Digital video subscription spend, September 2018
                                                                                            • Subscriptions take up significant share of total video spend
                                                                                              • Figure 19: Average subscription spend vs average total video spend, September 2018 and August 2017
                                                                                            • Finding the perfect age for more content
                                                                                              • Figure 20: Average digital video subscription spend, by presence and age of children, September 2018
                                                                                          • Saturation among Subscribers

                                                                                            • Key opportunity
                                                                                              • Little interest in heavy subscribing among subscribers
                                                                                                • Figure 21: Number of online movie/TV subscription services, September 2018
                                                                                              • Tepid interest in expanding streaming library
                                                                                                • Figure 22: Subscription saturation, September 2018
                                                                                              • Young adults may not have the resources to add what they want
                                                                                                • Figure 23: Subscription saturation – Select items, by age, September 2018
                                                                                              • Black, Hispanic viewers looking for more
                                                                                                • Figure 24: Subscription saturation – Select items, by race and Hispanic origin, September 2018
                                                                                            • Free Services

                                                                                              • Key opportunity
                                                                                                • Free services allow ads to reach consumers
                                                                                                    • Figure 25: Attitudes toward free video services, September 2018
                                                                                                  • Understanding key demos for content creators
                                                                                                    • Figure 26: Profile of content creators, by key demographics, September 2018
                                                                                                  • Younger consumers browse with higher expectations
                                                                                                    • Figure 27: Perceptions of free content quality, September 2018
                                                                                                • Attitudes toward Digital Video

                                                                                                  • Key opportunity
                                                                                                    • Most viewers are content with current offerings
                                                                                                      • Figure 28: Satisfaction with available video content, September 2018
                                                                                                    • Opportunities outside computer screens
                                                                                                      • Figure 29: Methods of watching online videos, September 2018
                                                                                                    • Best opportunities for mobile reach among young adults, women
                                                                                                        • Figure 30: Mobile viewing of online videos, by gender and age, September 2018
                                                                                                    • Appendix – Data Sources and Abbreviations

                                                                                                      • Data sources
                                                                                                        • Sales data
                                                                                                          • Consumer survey data
                                                                                                            • Consumer qualitative research
                                                                                                              • Direct marketing creative
                                                                                                                • Abbreviations and terms
                                                                                                                  • Abbreviations
                                                                                                                    • Terms
                                                                                                                    • Appendix – The Market

                                                                                                                        • Figure 31: Total US retail sales of digital video, at current prices, 2013-18
                                                                                                                        • Figure 32: Total US retail sales of digital video, by segment, at current prices, 2016 and 2018
                                                                                                                        • Figure 33: Total US OTT revenues, at inflation-adjusted prices, 2013-18
                                                                                                                        • Figure 34: Total US retail digital sales and rentals, at inflation-adjusted prices, 2013-18
                                                                                                                        • Figure 35: Total US retail physical sales and rentals, at inflation-adjusted prices, 2013-18
                                                                                                                        • Figure 36: Types of apps used in last 30 days, April 2013-June 2018
                                                                                                                    • Appendix – Key Players

                                                                                                                        • Figure 37: Teens’ use of online video services in last 30 days, April 2017-June 2018

                                                                                                                    Digital Video - US - November 2018

                                                                                                                    US $4,395.00 (Excl.Tax)