Consumers Embracing Streaming & Subscription Models

DALLAS: Consumers have been moving away from ownership and rental models for TV shows and movies and instead choosing streaming and subscription services, finds Parks Associates.

In its Online Video and Internet TV Services: Global Outlook report, Parks Associates found that in a six-month period, U.S. online video subscribers spent almost $50 on average for video subscriptions. Al la carte video typically garnered less than half that amount. From 2009 to 2010, the number of purchased movie and TV show downloads decreased by 56 percent; movie-rental downloads fell by 70 percent.

Parks attributes this to the proliferation of connected CE and smart TVs in the U.S. and Western Europe. The largest countries in Western Europe have penetration rates for CE in broadband homes comparable to the U.S. In France, Italy and Spain, 13 percent of broadband households have an active smart TV, compared to 14 percent in the U.S. Germany has the lowest rates of device penetration but the largest volume of monthly viewers of online video and the greatest average number of videos viewed per user per month.

"The sands are shifting for manufacturers and content providers as expanding numbers of households access their TV-displayed content online," said Tricia Parks, the CEO of Parks Associates. "Methods include smart TVs and a host of connected devices, several of which are in a high-growth trajectory. This shift will create havoc with today’s well-understood TV revenue model potential. All players want a piece of that revenue, but not all players will hold their current positions over time."