COVID-19 to Drive TVOD Usage

Usage of transactional VOD (TVOD) is set to “increase significantly” in 2020, according to Parks Associates, driven by COVID-19 stay-at-home measures.

Parks Associates OTT Video Market Tracker found that in Q1, 14 percent of U.S. broadband homes had used a TVOD service over the past 30 days, a 5-point increase from the previous year. Services like Amazon Prime Video, FandangoNOW and VUDU will see usage rise as studios offer early access to theatrical releases online.

“The idea of streaming current in-theater films was once a concept from a proposed streaming service called The Screening Room,” said Steve Nason, research director at Parks Associates. “This service never officially launched, but the COVID-19 pandemic has pushed the concept behind it into reality. Many steps in content windowing were narrowing already, but the current shelter-in-place orders pushed the digital distribution of new theatrical content to the front to offset the lost revenue from closed movie theaters.”

Disney has been experimenting with shorter windows on some of its key movie titles on Disney+, such as Frozen II and Onward. Parks Associates notes that the major studios are continuing to weigh if they should release new theatrical titles straight to VOD or wait for COVID-19 restrictions on theaters to be lifted.

“By moving more prime content online earlier, studios also increase the risk of piracy for their top-dollar assets,” Nason said. “Early window content has always been a target among pirates, but they’ve had to sneak cameras into theaters and bootleg low-quality recordings. Now, with releases going digital, pirated video will be higher quality, while consumers might feel emboldened to tap into pirated video since theaters are closed. This will put more pressure on the antipiracy efforts among video content and service providers.”

SVOD remains the most-used OTT service in the U.S., followed by AVOD, authenticated pay-TV, piracy, freemium, previously purchased content and TVOD.