SVOD Subscriptions On the Rise, Pay-TV Subs Declining

PORT WASHINGTON: There has been a 6 percent decline in the number of U.S. households subscribing to premium TV channels over the last two years, though the amount of households subscribing to SVOD grew 4 percent, according to a new report from The NPD Group.

The report, The State of SVOD, finds that 32 percent of U.S. households were subscribed to premium TV channels in August 2013, compared to 27 percent that subscribed to SVOD services. Overall, digital video transactions were up 3 percent since 2012, reaching 70 percent of all home video transactions in 2013. SVOD made up 71 percent of all digital video transactions, and it continued to increase faster than all other digital acquisition types.

Netflix emerged as the clear leader in SVOD. However, Hulu Plus and Amazon Prime are receiving the largest growth benefits in the category, as consumers begin to add on secondary SVOD services.

“As SVOD services have gained momentum, it’s clear that some consumers are trimming their premium-TV subscriptions,” said Russ Crupnick, the senior VP of industry analysis for The NPD Group. “As SVOD increasingly strives to become a channel itself, viewers might consider it to be an adequate substitution for other premium channels, or perhaps they are switching to economize on their time and money spent.”