Description

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Digital Video: Incl Impact of COVID-19 – US market, and the behaviours, preferences and habits of the consumer.

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What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

Digital video continues to be the fastest growing video entertainment in the US as more consumers shift to SVoDs like Netflix, Hulu or Amazon Prime Video as a replacement for traditional paid media. Netflix has maintained its leading position and has built upon its first-mover advantage with its investment in original content that continues to draw subscribers. However, the market continues to become increasingly competitive, as new players such as Disney+, Apple TV+ and Peacock have entered the market. Consumers can pick and choose from more video streaming services than ever before, so having the best library of content at competitive price points will be critical to success.

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Expert analysis from a specialist in the field

Written by Buddy Lo, a leading analyst in the Technology sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

More consumers now stream digital video content than watch cable or satellite TV. Paid TV packages are struggling to compete with the convenience and cost of on-demand internet based streaming services. To do so, cable and satellite providers are pivoting from paid TV to internet based service. As ISPs, they will remain prominent in video entertainment for delivering the bandwidth necessary to use digital services, but consumers are no longer shackled to the pricey, inflexible packages offered by the telecoms. Buddy Lo
Senior Technology Analyst

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definition
        • Executive Summary

            • Market Overview
              • Top Takeaways
                • Impact of COVID-19 on Digital Video
                  • Halted studio production limits new content, will hurt services with smaller libraries
                    • Loss of sports hits both paid TV and vMVPD services
                      • COVID-19 pandemic could create an opportunity for socially distanced viewing parties
                        • Theater shutdowns could transform movie releases
                          • Figure 1: Short-, medium- and long-term impact of COVID-19 on digital services and digital video, July 2020
                        • Opportunities and Challenges
                          • Binge and churn an issue for the industry
                            • Figure 2: Video streaming behaviors and willingness to opt for an annual subscription, by number of SVoD services used, May 2020
                          • Digital video streamers more price sensitive than traditional video viewers
                            • Figure 3: Price sensitivity of ideal streaming service, by any video and digital video services, April 2019 and May 2020)
                          • Less popular services more exposed to churn
                            • Figure 4: Video streaming behaviors, by SVoD streaming services used, May 2020
                          • Spending on digital entertainment still has a lot of potential for growth
                            • Figure 5: Consumer spending on cable, satellite, other live TV; video streaming and rental, annual, 2007-19 and Q1 2020
                          • Consumers are increasing the number of SVoD services they use
                            • Figure 6: Count of SVoD services used, April 2019 and May 2020
                          • Strategic releases could limit binge and cancel behavior among high users
                            • Figure 7: Attitudes toward digital video streaming – weekly releases, by number of services used, May 2020
                          • What’s next
                          • The Market – What You Need to Know

                            • SVoD streaming wars mature as major players move into the space
                              • Theater shutdowns could transform movie releases
                                • Increased digital behaviors will mean an increase in broadband demand
                                  • Bandwidth availability will need to increase for widespread 4K usage
                                  • The Market

                                    • Spending on digital entertainment still has a lot of room to grow
                                      • Figure 8: Consumer spending on cable, satellite, other live TV; video/audio streaming and rental, annual, 2000-19 and Q1 2020
                                    • Cord-cutting shifts video entertainment spend toward digital services
                                      • Figure 9: Cable and satellite TV subscriptions and cancellation, 2012-2019
                                    • Digital video usage trending upward
                                      • Figure 10: Digital streaming services used in the last 30 days, 2014-2019
                                  • Market Breakdown of SVoD Streaming Services

                                    • “Streaming wars” matures with major players entering the space
                                      • Figure 11: SVoD streaming services used, May 2020
                                    • Netflix (89% of SVoD users)
                                      • Figure 12: Profile of Netflix users, May 2020
                                      • Figure 13: Netflix US and Canada revenues and average paying memberships, January 2018-March 2020
                                    • Amazon Prime Video (64% of SVoD users)
                                      • Figure 14: Profile of Amazon Prime Video users, May 2020
                                      • Figure 15: Amazon Prime Video promotional email, July 2020
                                    • Hulu (50% of SVoD users)
                                      • Figure 16: Profile of Hulu users, May 2020
                                    • Disney+ (42% of SVoD users)
                                      • Figure 17: Profile of Disney+ users, May 2020
                                    • HBO Max – formerly HBO Now (17% of SVoD users)
                                      • Figure 18: Profile of HBO Now users, May 2020
                                    • Apple TV+ (11% of SVoD users)
                                      • Figure 19: Profile of Apple TV+ users, May 2020
                                    • Showtime (11% of SVoD users)
                                      • Figure 20: Profile of Showtime users, May 2020
                                    • CBS All Access (10% of SVoD users)
                                      • Figure 21: Profile of CBS All Access users, May 2020
                                    • STARZ (8% of SVoD users)
                                      • Figure 22: Profile of Starz users, May 2020
                                    • Peacock
                                    • Market Perspective

                                      • Theater shutdowns could transform how movies are released and spur PAYG adoption
                                        • Figure 23: Future activities and COVID-19 exposure concerns, April 16, 2020-July 7, 2020
                                      • Data limits by telecoms will lead to sticker shock by heavy streamers
                                        • Quibi’s problems go beyond COVID-19
                                          • Low-commitment vMVPDs can bolster confidence for sports content
                                            • Bundling and free trials will play a rising role in building a subscriber base
                                              • Figure 24: Xfinity Flex promotional email, May 2020
                                          • Market Factors

                                            • Social distancing and shelter-in-place measures spur increased use of digital entertainment
                                              • Reopening economy will give consumers more nondigital leisure activities
                                                • COVID-19 shutdowns impact production – slowing content generation
                                                  • Higher resolution delivery will demand higher bandwidth
                                                    • vMVPDs lose subscribers amid COVID-19 pandemic
                                                    • Key Players – What You Need to Know

                                                      • Netflix remains the standard in video streaming
                                                        • Disney+ skyrockets to the fourth most used streaming service
                                                          • Quibi flops while other streaming services thrive
                                                            • NBC’s Peacock streaming platform goes live July 2020
                                                              • Media spins HBO Now into more comprehensive HBO Max
                                                                • Releases can shape the social media conversation around a program
                                                                • Case Study – Content and Release Strategies During COVID-19

                                                                    • Surreal Tiger King true crime documentary captures America’s attention for a flash
                                                                      • Figure 25: Netflix Tiger King promotional tweet, March 2020
                                                                      • Figure 26: Social media mentions of “Tiger King” and “Joe Exotic,” March 1, 2020-May 31, 2020
                                                                    • Heavy marketing and scheduled releases keep consumers talking about The Mandalorian start to finish
                                                                      • Figure 27: The Mandalorian promotional tweet, November 2019
                                                                      • Figure 28: Social media mentions of “The Mandalorian” and “Baby Yoda,” November 1, 2019-January 31, 2020
                                                                    • Late scheduled airing pushes The Last Dance conversation to the next day
                                                                      • Figure 29: ESPN Instagram post, April 2020
                                                                      • Figure 30: Social media mentions of The Last Dance and Michael Jordan, March 24, 2020-June 16, 2020
                                                                  • What’s Working

                                                                    • Netflix retains its top pole position in the streaming space
                                                                      • Figure 31: Netflix Unbreakable Kimmy Schmidt: Kimmy vs the Reverend promotional email, May 2020
                                                                    • Netflix spikes ad campaign volume during COVID-19
                                                                      • Figure 32: Number of Netflix and Hulu marketing campaigns, January 2019-June 2020
                                                                    • Disney+ skyrockets to the fourth most used streaming service
                                                                      • Apple TV+’s Mythic Quest: Raven’s Banquet produces COVID-19 episode
                                                                      • What’s Struggling

                                                                        • Quibi flops while other streaming services thrive
                                                                          • vMVPDs lose subscribers amid COVID-19 pandemic
                                                                          • What to Watch

                                                                            • NBC’s Peacock streaming platform goes live July 2020
                                                                              • Warner Media spins HBO Now into more comprehensive HBO Max
                                                                                • Social watch parties available on Hulu and Amazon Prime Video
                                                                                • The Consumer – What You Need to Know

                                                                                  • Streaming users overtake traditional cable and satellite TV users
                                                                                    • Netflix remains the top of the SVoD streaming market
                                                                                      • Binge watching is an enjoyable activity for streamers
                                                                                        • Optimal price point for the ideal streaming service is $18
                                                                                          • Sizeable demand for yearlong subscriptions
                                                                                            • Nearly six in 10 SVoD users use three or more services
                                                                                            • Video Entertainment Services Used

                                                                                              • Streaming overtakes cable and satellite TV users
                                                                                                • Figure 33: Video entertainment services used, May 2020
                                                                                                • Figure 34: Video entertainment services used, April 2019 vs May 2020
                                                                                              • Younger men lead the transition to vMVPDs
                                                                                                • Sports are key for vMVPD success
                                                                                                  • Figure 35: Video entertainment services used – live digital TV and sports streaming, by gender and age, May 2020
                                                                                                • Older consumers maintain classic cable and satellite TV setup
                                                                                                  • Figure 36: Video entertainment services used – cable or satellite TV, by age, May 2020
                                                                                                  • Figure 37: Xfinity direct mail promotion, June 2020
                                                                                              • SVoD Streaming Services Used

                                                                                                • Netflix usage tops SVoD streaming market
                                                                                                    • Figure 38: SVoD streaming services used, May 2020
                                                                                                    • Figure 39: SVoD streaming services used, April 2019 and May 2020
                                                                                                  • Vast children’s content on Disney+ boosts usage among parents
                                                                                                    • Figure 40: SVoD streaming services used, by parental status, May 2020
                                                                                                  • Free to use Tubi TV skews lower income – Amazon Prime skews higher income
                                                                                                    • Figure 41: SVoD streaming services used, by household income, May 2020
                                                                                                  • Black consumers are strong participants in SVoD streaming
                                                                                                    • Figure 42: SVoD streaming services used – select services, by race and Hispanic origin, May 2020
                                                                                                  • HBO Now and Netflix users more likely to use some else’s login
                                                                                                    • Figure 43: SVoD service login info, by SVoD service used, May 2020
                                                                                                  • Nearly six in 10 users use three or more services
                                                                                                    • Figure 44: Number of SVoD services used, April 2019 and May 2020
                                                                                                    • Figure 45: Number of SVoD services used, April 2019 and May 2020
                                                                                                    • Figure 46: Number of SVoD services used, by generation, April 2019-May 2020
                                                                                                • Video Streaming Behaviors

                                                                                                  • Two out of three streamers say they like to binge watch
                                                                                                      • Figure 47: Video streaming behaviors, May 2020
                                                                                                    • Binge releases enable rapid churning
                                                                                                      • Binge releases let high volume users consume and cancel
                                                                                                        • Figure 48: Video streaming behaviors, by video streaming behaviors, May 2020
                                                                                                        • Figure 49: Video streaming behaviors and willingness to opt for an annual subscription, by number of SVoD services used, May 2020
                                                                                                      • Less-popular services more exposed to consumers who churn
                                                                                                        • Figure 50: Video streaming behaviors, by SVoD streaming services used, May 2020
                                                                                                      • Free trials effective across all income thresholds
                                                                                                        • Figure 51: Video streaming behaviors, by household income, May 2020
                                                                                                      • Pay-as-you-go users more likely to repeat their favorite content
                                                                                                        • Figure 52: Video streaming behaviors, by video services used, May 2020
                                                                                                    • Price Sensitivity Analysis – Ideal Streaming Service

                                                                                                      • Video streamers more price conscious than general public
                                                                                                        • Figure 53: Price sensitivity of ideal streaming service, April 2019 and May 2020
                                                                                                      • Optimal pricing for digital video streaming packages
                                                                                                        • Figure 54: Price sensitivity – optimal price, May 2020
                                                                                                      • Black consumers willing to pay more for their ideal streaming service
                                                                                                        • Figure 55: Price sensitivity of ideal streaming service, by race and Hispanic origin, May 2020
                                                                                                        • Figure 56: Price sensitivity of ideal streaming service, by household income, May 2020
                                                                                                    • Attitudes toward Digital Video Streaming

                                                                                                      • Streamers willing to spend – but also want to lock in savings
                                                                                                        • Figure 57: Attitudes toward digital video streaming – discounts and spending, May 2020
                                                                                                      • Access to content more important than an ad-free experience for lower income households
                                                                                                        • Figure 58: Attitudes toward digital video streaming – discounts and spending, by household income, May 2020
                                                                                                      • SVoD users are overall positive about binge watching
                                                                                                        • Figure 59: Attitudes toward digital video streaming – binge watching, by consumers who like to binge watch, May 2020
                                                                                                        • Figure 60: Attitudes toward digital video streaming – binge watching, by parental status, May 2020
                                                                                                      • SVoD services should be more strategic over binge releases
                                                                                                        • Binge releases have pros and cons in consumer engagement
                                                                                                          • Strategic releases could limit binge and cancel behavior among high users
                                                                                                            • Figure 61: Attitudes toward digital video streaming – weekly releases, by number of services used, May 2020
                                                                                                          • Opportunity for further innovation in digital video streaming
                                                                                                            • COVID-19 pandemic could lead to socially distanced viewing parties
                                                                                                              • Centralized platforms will gain popularity as use of SVoDs increase
                                                                                                                • Improved algorithms can get users watching more and browsing less
                                                                                                                  • Figure 62: Attitudes toward digital video streaming – streaming innovations, May 2020
                                                                                                              • Consumer Segmentation – Attitudes toward Video Streaming

                                                                                                                • Three segments of consumers identified based on attitudes toward video streaming
                                                                                                                    • Figure 63: SVoD streamer consumer segments, May 2020
                                                                                                                  • Light Streamers (34%)
                                                                                                                    • Characteristics
                                                                                                                        • Figure 64: Characteristics of Light Streamers, May 2020
                                                                                                                        • Figure 65: Number of SVoD services used, by consumer segments, May 2020
                                                                                                                        • Figure 66: Financial situation, by consumer segments, May 2020
                                                                                                                      • Opportunities
                                                                                                                        • Figure 67: Number of SVoD services used, by consumer segments, May 2020
                                                                                                                      • Voracious Viewers (35%)
                                                                                                                        • Characteristics
                                                                                                                          • Figure 68: Characteristics of Voracious Viewers, May 2020
                                                                                                                        • Opportunities
                                                                                                                          • Figure 69: Video services used – cable/satellite/digital TV, by consumer segments, May 2020
                                                                                                                          • Figure 70: Knowledge and interest in categories – entertainment, by consumer segments, May 2020
                                                                                                                          • Figure 71: Price sensitivity of ideal streaming service, by consumer segments, May 2020
                                                                                                                        • Account Sharers (31%)
                                                                                                                          • Characteristics
                                                                                                                            • Figure 72: Characteristics of Account Sharers, May 2020
                                                                                                                            • Figure 73: Type of network plan, by gender and age, January 2020
                                                                                                                            • Figure 74: Price sensitivity of ideal streaming service – trading login information, by consumer segments, May 2020
                                                                                                                            • Figure 75: SVoD service login info, by consumer segments, May 2020
                                                                                                                          • Opportunities
                                                                                                                              • Figure 76: The Marvelous Mrs. Maisel Amazon Prime Video email promotion, December 2019
                                                                                                                              • Figure 77: Margaret Atwood Hulu documentary email promotion, March 2020
                                                                                                                              • Figure 78: The Great Hulu email promotion, May 2020
                                                                                                                          • Appendix – Data Sources and Abbreviations

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

                                                                                                                                            • Figure 79: Digital streaming services used in the last 30 days, 2017-2019
                                                                                                                                            • Figure 80: Digital streaming services used in the last 30 days, 2014-2016
                                                                                                                                        • Appendix – Price Sensitivity Analysis

                                                                                                                                          • Pricing for digital video streaming packages
                                                                                                                                            • Figure 81: Price sensitivity – optimal price, May 2020
                                                                                                                                            • Figure 82: Price sensitivity – threshold prices, May 2020
                                                                                                                                            • Figure 83: Price sensitivity – Price Sensitivity aggregate table, May 2020
                                                                                                                                            • Figure 84: Price sensitivity – Price summary table, May 2020
                                                                                                                                          • Methodology
                                                                                                                                          • Appendix – Mintel Global Trend Drivers

                                                                                                                                              • Figure 85: Mintel Global Trend Drivers and Pillars

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