UK set to binge on Christmas Over-the-Top' pay-TV services as subscriptions nearly double in a year, Paywizard survey reveals
Paying subscribers for UK Over-the-Top (OTT) TV services nearly doubles in a year to more than a third of all consumers, as British audiences get set for Christmas viewing
OTT subscriptions set for a further boost as a quarter of Brits plan to gear up for holiday TV binge by taking a new service
Yet operators likely to struggle with post-Christmas retention, as 55% of first-time subscribers aim to cancel within six months
London, 13th December 2016 - United Kingdom television audiences are preparing to feast on holiday viewing this Christmas and Over-the-Top (OTT) TV services are top of the menu, as the proportion of British consumers subscribing to paid video-on-demand services has soared from 19% to 34% over the last year, according to new research from subscription, billing and CRM specialist Paywizard.
With its tradition of festive TV specials, the UK Christmas television schedule is jam-packed with special programs and the research shows 71% of Brits intend to watch more TV during the holiday period - making it the binge viewing leader of the six key markets surveyed for the global study of TV trends during the yuletide season.
As the most valuable pay-TV market in Europe, the UK has been an early adopter of pay-OTT services and shows no sign of slowing down: the research reveals 18% of UK consumers are planning to take an OTT subscription for the first time ahead of the 2016 holiday season and 7% are expecting to add an extra pay-OTT service - a combined total of 25%, up from 20% in last year's survey.
The survey of 6,200 consumers worldwide - including 1,044 Brits - was commissioned by Paywizard and conducted by Research Now. It reveals 71% of UK consumers now pay for some form of TV service, including cable, satellite or an internet TV operator such as Netflix, Amazon Prime Instant Video, or Now TV.
The Christmas TV rush promises to boost the overall number of OTT subscribers this holiday season, as the percentage of consumers expecting to take an online pay service for the first time (18% of all respondents) added to the proportion who are existing subscribers (34%) brings the percentage total of UK consumers projected to have a pay on-demand service going into 2017 to 52%.
However, this expected lift in OTT subscriptions may be short-lived, as the survey also found that 55% of first-time UK Christmas subscribers intend to cancel within six months, indicating a strong dip-in, dip-out attitude towards pay-OTT services. This is slightly higher that the global figure of 50%.
Bhavesh Vaghela, Chief Marketing Officer at Paywizard, notes: Even with a single dominant satellite operator, cable services provider and world leading public broadcaster, UK audiences have embraced pay-OTT services, with adoption almost doubling in a single year. But it is also clear OTT operators must fight to retain any gains they make this Christmas.
A range of Devices
In terms of device, marginally more people plan to do their Christmas viewing on a traditional or smart TV this Christmas than last (82% versus 78%), while the same proportion as in 2015, 40%, intend to use a mobile device for at least part of the time. The proportion aiming to use a streaming device, such as Roku, Apple TV and Chromecast, rose slightly by 3% to 10%.
Local players challenging the global brands
While international giants Netflix and Amazon Prime are driving OTT uptake, local challenger Now TV is also growing strongly, with 19% of those who plan to take a digital service for the first time this Christmas intending to go with it.
Vaghela observes: New entrants such as Now TV and BT have both come into the market and gained significant uptake, which demonstrates there is tremendous potential for local challengers to carve out sustainable businesses and compete with the global brands.
However, the research also indicates that not only do operators need to get their pricing right and offer a compelling mix of content; they must make sure to provide a consistently positive customer experience, as almost a third of the existing UK OTT subscribers surveyed listed this among their top three reasons for cancelling a service:
Too expensive (68%)
Not much to watch (40%)
Bad customer experience (29%)
Service providers cannot expect growth to last for ever and content is not enough to build brand loyalty. Elements such as customer service, provider recommendations and package flexibility will increasingly become vital to cementing subscriber loyalty and reducing churn, which is much higher for pay-OTT than traditional cable and satellite services, Vaghela observes.
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UK set to binge on Christmas Over-the-Top' pay-TV services as subscriptions nearly double in a year, Paywizard survey reveals
