Ampere: Subscriber Stacking is Driving SVOD Market

In major markets such as the U.S., U.K. and Germany, homes with multiple SVOD services are on the rise, Ampere Analysis reports.

In established markets, the average SVOD home now takes two services, Ampere says; this number rises to three in the U.S. Netflix and Amazon lead the field, with Netflix taking the top spot in the markets surveyed. SVOD service stacking has become the norm in many mature territories, Ampere says, with household spend on these services skyrocketing. In the U.S. SVOD subscription spending in the first quarter of this year was $35 per home, up from $15.60 in Q3 2015. In the U.K. spending rose from $10.40 to $18.70. This upward trend was seen in many markets, excluding Spain and Italy, where there has been a decline in SVOD spend per home, driven by Amazon’s low launch price.

“Netflix and Amazon have acted as catalysts for SVOD stacking, particularly in those European markets where they have seized the initiative through low-cost subscriptions,” said Toby Holleran, senior analyst at Ampere Analysis. “While some European countries have been slower to adopt SVOD, the American giants are now part of the package in virtually every SVoD household. This is particularly notable in The Netherlands, where nearly three in four SVOD households take only Netflix.”

Other key findings include that SVOD growth is slowing in the U.K., Germany and Poland, but it is still eating into pay-TV gains. In France, Italy and Spain, Netflix and Amazon are driving stacking behavior. In Denmark, Sweden and the Netherlands, SVOD gains are driving cord-cutting.

“While the SVOD market may be near saturation point in terms of the number of households it attracts, there remains significant growth opportunity as viewers increasingly stack services,” says Tony Maroulis, research manager at Ampere. “Although in some cases a growing number of SVOD subscriptions is leading to a decline in pay TV, that is certainly not always the case—heavy stackers are most likely to have pay-TV services. Clearly there’s a healthy appetite amongst consumers worldwide for quality content across a range of paid-for platforms.”