Many U.S. Broadband Households Likely to Subscribe to OTT HBO Service

  • HBO
  • Parks Associates
DALLAS, TX — New video research from Parks Associates, a market research and consulting company specializing in emerging consumer technology products and services, finds that 17 percent of U.S. broadband households are likely to subscribe to an over-the-top (OTT) video service from HBO. Among these likely subscribers, 91 percent are currently pay-TV subscribers, and roughly one-half would cancel their pay-TV service after subscribing to this HBO OTT service. The research firm reports the average head of household in a U.S. broadband household watches nearly 3.5 hours of OTT video each week on a TV set.

The report, entitled "The 360 View Update — Market Focus Consumer Segmentation: OTT Video Buyers," which includes a Q4 2014 survey of 10,000 U.S. broadband households, finds an HBO OTT offering will create competitive challenges for all ecosystem players, including Netflix, Amazon, and pay-TV providers.

Parks-Associates--Willingness-to-Subscribe-to-New-OTT-Services

"HBO picked a good time to announce its standalone HBO Go OTT service in the U.S.," said Glenn Hower, research analyst, Parks Associates. "The percentage of subscribers interested in OTT video services is trending upward, and more industry players are planning to launch their own OTT services. DISH announced at CES 2015 that its OTT service, Sling TV, will include live TV such as CNN, ESPN, ESPN2, TNT, and TBS. Sports programming could be a major addition for standalone OTT services as sports is one of the primary reasons consumers elect to keep pay-TV services."

2015: The Year of OTT
"2015 is set to be the year of OTT," said Brett Sappington, director, research, Parks Associates. "Along with the new services from CBS, HBO, and DISH, we expect several other players to launch or announce services in the U.S. market in the next few months. In Canada, Rogers Communications and Shaw Communications unveiled their shomi online video service in November. In Europe, several players are starting up new OTT services to counter the entry of Netflix into their markets. Others are expanding their OTT offerings in order to reach customers both in their home markets and expatriates who want to watch programs from home."

The Evoloving TV Set
Over 50 percent of U.S. broadband households subscribe to an OTT video service, but Parks Associates analysts say this finding does not mean consumers are ready to abandon their televisions. "Television is not dying, but it is evolving," Hower said. "Linear video comprises only a slim majority of video viewed on the TV screen at 51 percent, and overall video consumption has shifted to on-demand sources. The age of appointment television is coming to a close, and programming will need to adapt to an on-demand environment."

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