Germans embrace Over-the-Top' pay-TV services as subscriptions double and more coming this Christmas, Paywizard survey reveals
Paying subscribers for Over-the-Top (OTT) services more than doubles to 37%, as German consumers are moving to to video on demand
24% set to add new pay-OTT subscriptions this - more than half for the first time
Yet operators likely to struggle with retention as 54% of first-time subscribers aim to cancel within six months
London, 13th December 2016 - Television viewers in Germany are embracing Over-the-Top (OTT) pay-TV services after previously favouring free video-on-demand, with the number of paying subscribers more than doubling from 16% to 37% since last year, new research from subscription, billing and CRM specialist Paywizard reveals.
Historically slow adopters of pay-TV, German consumers now appear as keen as those in other countries to subscribe to OTT with 24% planning to sign-up or add additional services this Christmas - the same percentage as last year. From a slow start prior to 2015, the German market is now the fastest growing in terms of pay-OTT subscriptions of the six key markets surveyed for the global study of TV viewing trends during the Christmas period. The survey, conducted by Research Now and commissioned by Paywizard, includes responses from 1,048 German consumers.
In terms of overall viewing, 58% of German audiences plan to watch more TV than usual at Christmas with 25-34-year-olds watching the most. The survey suggests that 55% of German audiences now pay for some form of TV service, including cable, satellite or an internet TV service such as Amazon Prime Instant Video, Netflix or Maxdome.
OTT in particular is projected to receive a big boost this holiday season: the percentage of consumers expecting to take an OTT service for the first time (14% of all respondents) added to existing subscribers (37%) brings the total of German consumers expected to have a pay-OTT service by Christmas to 51%. Additionally, 10% who already have at least one subscription plan to add another one prior to the festive season.
Bhavesh Vaghela, Chief Marketing Officer at Paywizard, notes: It's clear Germans have developed a strong appetite for pay-OTT, with close to a quarter of consumers planning to add a service ahead of Christmas both this year and last year. It is evident most followed through on their intention last year to sign up to a pay-OTT service and many kept their subscription. The research also reveals that OTT is giving cable and satellite a good run for their money in Germany, with Amazon Prime now the leading pay-TV brand of any type.
On the downside, although new pay-OTT subscriptions are set to surge, 54% of first-time German Christmas subscribers intend to cancel within six months, indicating a strong dip-in, dip-out attitude towards OTT TV service. This is slightly higher that the global figure of 50%.
Although there is a lot of good news in the survey for pay-OTT providers in Germany, they cannot be complacent as the findings strongly demonstrate the need to find ways of strengthening bonds with subscribers and build brand loyalty, Vaghela observes.
As a market with a huge choice of pay-TV options, German consumers are in still in an exploration phase, rejecting the global dominance of Netflix in favour of Amazon Prime Instant Video - the only territory where this is the case. It is also clear local operators are flourishing, with Maxdome doing especially well, as 22% of those planning to take OTT for the first time intend to subscribe to it.
Another aspect in which Germany differs from other markets in the survey is Christmas viewing on mobile devices, which is projected to be lower than in any other country, as just 31% of Germans plan to use a smartphone, tablet or laptop to watch TV this holiday season. This is down sharply from 43% last year, suggesting growing integration of pay-OTT service capability within smart TVs.
The German findings highlight that competition is alive and well in this market with 12 operators in our survey having at least 1% uptake by those paying for a TV service and no operator with more 50%, says Vaghela. The growth of smaller pay-TV operators is healthy and the launch of new services such as DAZN, with its focus on live and video-on-demand sports content, suggests that there is still room for innovators to grow faster than international and incumbent rivals.
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Germans embrace Over-the-Top' pay-TV services as subscriptions double and more coming this Christmas, Paywizard survey reveals
