Amidst Disappointing Numbers, YouTube Music Launches in 7 More Countries

Late last year, Google revealed it would launch yet another attempt to finally break into the streaming music market.

Spotify had around 60 million subscribers at the time. Apple Music was hovering at the 30 million mark. Google Play Music had nearly 7 million paying subscribers. YouTube Red had around 1.5 million.

The service, codenamed ‘YouTube Remix,’ aimed to appease disillusioned music industry executives who have long slammed YouTube’s low payouts.

Several questions immediately emerged. Most importantly, how would Google convince YouTube’s 1.8 billion+ user base to pay up?

After all, the IFPI found that 35% of music lovers don’t subscribe to a streaming music service because they can already listen to free on YouTube. How would the search giant compel these consumers to subscribe?

Google soon launched YouTube’s streaming music service with two very confusing tiers.

For $9.99, you can stream millions of songs and music videos without ads on YouTube Music Premium. You can also download songs for offline listening, but not some playlists. And, you’ll have to watch ads on almost every other video on the service.

For $11.99, you can stream millions of songs and music videos as well as other videos completely ad-free on YouTube Premium. That means you can enjoy Drake’s latest hits and watch Cobra Kai without having to worry about skipping ads.Why would the search giant launch yet another streaming music service?

Would Google terminate or merge its existing Play Music service with YouTube’s newest streaming music platform?

As expected, the service launched earlier this year. But it’s struggled out of the gate.
According to a study from Parks Associates, Premium no longer ranks among the top 10 streaming services in the US.

Following a major overhaul in May, YouTube Music has launched in 22 countries. Yet, the service has kept its actual subscription numbers a closely-guarded secret.

Now, in an effort to rescue its floundering streaming service, the streaming music service has launched in 7 more countries.

Starting today, users in Cuba, Colombia, Japan, Peru, Portugal, Switzerland, and Ukraine can sign-up for the service.

read more here: digitalmusicnews.com

Netflix ‘on course’ to pass 10 million subscribers in UK

Netflix is on course to pass the 10 million-subscriber mark in the UK by the end of this year, according to research by MTM.

According to MTM, some 1.1 million consumers intend to subscribe to the service by the end of this year, taking the service’s total past the 10 million subscriber mark.

MTM says that Netflix subscribers are among the most satisfied users of SVOD services in the UK with 88% claiming to be satisfied, the highest rating for any subscription TV or video service. This means that churn levels for the service are a less significant challenge than for other SVOD offerings.

According to MTM, Netflix’s integration as part of the Sky Q offering could support further growth for the SVOD service, with 200,000 current Sky Q users looking to subscribe to Netflix by the end of 2018.

MTN says that the ability to easily access Netflix’s service on the primary TV screen will likely increase Netflix’s share of overall viewing within Sky Q homes, pointing out that 31% of all cable operator Virgin Media’s homes with Tivo advanced TV set-tops currently access Netflix via their set-top box.

According to MTM’s ScreenThink market research tracker, based on a survey of over 3,000 UK online users, almost 25% of internet users say that services such as Netflix and YouTube are the first services they turn to when looking for TV or video content, rising to 39% of 16-24 year-olds.

Conversely, 54% of UK pay TV subscribers now believe that their TV service is overpriced, and 1 in 4 are thinking about cancelling their subscription.

“The most recent ScreenThink study provides a fascinating snapshot of a market in transition, demonstrating the significant impact of Netflix and other OTT video services in the UK market,” said Jon Watts, managing partner at MTM.

read more here: digitaltveurope.com

15% of Pay TV Customers Downgraded Service in the Last Year

According to the researchers at Parks Associates, 15 percent of all pay TV subscribers in the U.S. with broadband connectivity downgraded to a less expensive service in the last year. Also, 34 percent changed their pay TV service in some way. Other changes include switching to a new TV provider, upgrading to a more expensive service, subscribing to a TV service after not having service for a year or longer, and subscribing to a TV service for the first time.

The industry is seeing a wave of people leave pay TV and sign up for one or more OTT accounts. According to Elizabeth Parks, senior vice president at Parks Associates, OTT subscription numbers keep rising—with 64 percent of U.S. broadband households now signing up—while pay TV subscriptions are declining.

Last week, Parks revealed that 47 percent of U.S. homes with broadband watch user-generated content two or more times per month.

Parks Associates: Recent Changes Made to Pay-TV Service (PRNewsfoto/Parks Associates)

“User-generated live content is gaining popularity, with platforms such as Instagram Live providing new ways for content creators to engage with their viewers in real-time,” says Billy Nayden, research analyst for Parks. “As more alternatives to traditional TV emerge, all players will explore new and unique ways to package and present digital streaming as part of their services.”

Cordless TV streamers prefer Amazon Prime Video to Netflix

New comScore data shows one-third of TV streamers are cordless. It also shows that cordless Amazon Video users watch 13% more than Netflix users. The difference is all in their content strategies.

Cord-cutter and cord-never differences

According to comScore, one-third of households streaming to the television are cordless. The other two-thirds have either cable, satellite, or telco pay TV services. The cordless group is broken into two broad categories: those that had pay TV and got rid of it (18%) and those that have never had pay TV (14%.)

The cord-cutter group primarily skews older than the cord-never group. The largest group of cord-cutters comes from the 35-44-year-olds, with 23%. 21% of cord-cutters are millennials (18-34-year-olds). Millennials dominate the cord-nevers. 24% of 18-34-year-old TV streamers have never had pay TV, versus 15% of 35-44-year-olds.

Cordless favor Hulu, YouTube

Hulu has the highest percentage of cordless subscribers of the top four online video services. Hulu subscribers make up almost half of those without pay TV. 41% of YouTube users are cordless, and 37% of Netflix and Amazon Prime Video are cordless.

Cordless Hulu users also watch a lot more online video on their televisions. They watch, on average, 86 hours per month and stream to the TV 21.6 days per month. Cordless YouTube users watch 78 hours per month and stream to the TV 19.8 days a month. Surprisingly, Amazon Prime Video users best Netflix in engagement among the cordless users. Amazon users watch 70 hours and 19.8 days per month, Netflix users watch 62 hours and 18.6 days per month.

The comScore data could suggest that, though the cordless group rejects pay TV, they are not rejecting traditional television. They will continue to hear about great TV shows through the social and traditional media and around the water cooler. Moreover, when they hear about a great show, the place they are most likely to find it online is Hulu.

Why cordless Amazon users watch more than Netflix
Another interesting question is why those cordless TV streamers using Amazon watch significantly more (12%) than those using Netflix. This fact is particularly interesting given there is a large overlap between the two groups.

The viewing difference stems from the different content business models used by both companies. Amazon provides a far greater variety of content than Netflix because it resells other SVOD services through its Channels program. It also rents and sells movies through the Prime Video app. According to Ampere Analysis, consumers could access 26,000 distinct movie and TV show titles through Amazon Prime Video as of February 2017.*

read more here: nscreenmedia.com

85% of U.S. Millennials Subscribe to At Least One OTT Video Service

A big majority – more than 85% — of U.S. millennials in broadband homes subscribe to least one OTT video service, according to new data from Parks Associates.

Broken down further, more than one-fourth of those millennials subscribe to three or more OTT services, and more than half take at least two subscription OTT video services.

Those totals suggest that the market among that age group is not only saturated, but present a significant challenge for OTT services retain existing subs.

“Overall penetration of subscription OTT video services among millennials has topped out, suggesting that those households that want such a subscription already have one or more,” Brett Sappington, senior director of research at Parks Associates, said in a statement. “The more interesting and important question is how many subscriptions they will keep.”

In its latest OTT Video Market Tracker, which analyzes trends and profiles of nearly 150 over-the-top service providers such as Netflix, YouTube and Amazon, in the U.S. and Canada, the research firm also found that more than 70% of U.S. broadband homes have an internet-connected entertainment device.

That data also shows that consumers, on average, own 8.6 connected CE products, up 87% since 2010. Some 70% of U.S. broadband homes have an internet-connected device, and 17% own a smart home device and an internet-connected entertainment device, the firm said.

Parks Associates predicts that more than 265 million households worldwide will have north of 400 million OTT video service subscriptions by 2022.

read more here: multichannel.com

2018 Will Be Netflix’s Best Year (yet)

Netflix’s growth, especially outside the United States, has been so robust that some analysts had to change their outlooks. “These forecasts are a lot higher than the last edition of this report,” says Simon Murray, principle analyst at Digital TV Research, of his Netflix Forecasts report. “Similar to many other analysts, we underestimated the fast take-up in international markets.”

That fast take-up suggests Netflix will have its strongest year ever in 2018 as it adds 28 million subscribers. Its growth should slow after that, Digital TV Research believes.

By the end of 2023, look for the SVOD leader to count 201 million subscribers around the world. That’s up from 111 million at the end of 2017. By the end of 2023, North America and Western Europe will make up 62 percent of Netflix’s customer base. That’s down from the 76 percent they made up in 2017 thanks to surging demand in other countries. For example, look for the Asia Pacific region to make up 14 percent of Netflix’s base by the end of 2023.

“Netflix expanded to 130 more countries (notably excluding China) in January 2016 to bring its total to 190 countries.” says Simon Murray, principle analyst at Digital TV Research. “The 130 new countries will have 40 million subs combined by 2023, quintuple the 8 million at end-2017. The 2023 figure corresponds to 20 percent of Netflix’s global total; up from only 7 percent in 2017.”

As for revenue, look for it to grow from $11.3 billion in 2017 to $28.8 billion by the end of 2023. Of that, $11.2 billion will come from the U.S.

U.S. pay TV providers lost 305K subs in Q1, 2018

Leichtman Research Group, Inc. (LRG) found that the largest pay-TV providers in the U.S. – representing about 95% of the market – lost about 305,000 net video subscribers in 1Q 2018, compared to a pro forma loss of about 515,000 subscribers in 1Q 2017.

The top pay-TV providers now account for about 91.9 million subscribers – with the top six cable companies having 47.8 million video subscribers, satellite TV services 31.1 million subscribers, the top telephone companies 9.2 million subscribers, and the top Internet-delivered pay-TV services 3.8 million subscribers.

Key findings for the quarter include:

The top six cable companies lost about 285,000 video subscribers in 1Q 2018 – compared to a loss about 115,000 subscribers in 1Q 2017. Satellite TV services lost about 375,000 subscribers in 1Q 2018 – compared to a loss of about 340,000 subscribers in 1Q 2017. The top telephone providers lost about 50,000 video subscribers in 1Q 2018 – compared to a loss of 325,000 subscribers in 1Q 2017.

Net losses for the top Telcos in 1Q 2018 were the fewest in any quarter since 3Q 2015

AT&T U-verse did not report net video losses for the first time since 1Q 2015

Internet-delivered services (Sling TV and DIRECTV NOW) added about 405,000 subscribers in 1Q 2018 – compared to about 265,000 net adds in 1Q 2017

Traditional pay-TV services (not including Internet-delivered services) lost about 710,000 subscribers in 1Q 2018 – compared to a loss of about 780,000 in 1Q 2017

“The number of pay-TV subscribers for the top providers peaked six years ago. Since 1Q 2012, top providers have lost about 3.4 million total pay-TV subscribers,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “Since the industry’s peak, traditional services have lost about 7.2 million subscribers, while the top publicly reporting Internet-delivered services gained about 3.8 million subscribers.”

How HBO gets into 50 percent of US homes

According to HBO CEO Richard Plepler, the company has an opportunity to reach 50% penetration of homes in the US. Reaching that goal requires a lot more growth because HBO is in around a third of homes today.

HBO grew subscribers an impressive 5 million in 2017. Moreover, Mr. Plepler says the 35% of the company’s growth has come in the last five years. Performance such as this is likely the reason Mr. Plepler believes he can ultimately drive the service into half of US homes:

“We think there’s a lot of growth left. We’re going to attack it.”

However, where is all that growth coming from today, and where is it likely to come from in the future?

HBO Now growing strongly

HBO launched its direct-to-consumer online service HBO Now in April 2015, after several years of relatively little subscriber growth for the premium channel. It took the company almost two years to reach 2 million subscribers. However, 2017 was a watershed year for the service. The company saw subscribers climb from 2 million in February to 5 million by the end of the year.

The increase of 3 million subscribers in HBO Now helped propel the channel to its best year of subscriber growth ever, increasing by 5 million. So, where did the other 2 million subscribers come from, and how will it get to 50% penetration?

Traditional pay TV unlikely to help

If HBO saw any subscriber growth from traditional pay TV operators at all last year, it was minimal. Cable, satellite, and telcoTV operators are shedding subscribers at a steady clip. They lost around 3.5 million in 2017. However, their customers are also dropping premium tiers like HBO to save money. Mr. Plepler says that his best pay TV operator partners have HBO in 50% of customer homes. However, deepening penetration of a shrinking market may not result any growth at all.

vMVPDs an important part of HBO’s growth

Virtual MVPDs like Sling TV and DirecTV Now allow customers to subscribe to HBO through their services. For example, a DirecTV Now customer can add HBO for just $5 a month. Sling TV and PlayStation charge the standard $15 a month.

In 2017, vMVPDs grew strongly. Sling TV finished the year with 2.2 million subscribers, up 40% from one year earlier. DirecTV Now ended the with 1.46 million subscribers, up from 200,000 one year earlier. Assuming the same penetration level of vMVPDs as regular pay TV, HBO could have more than a million subscribers coming from Sling TV and DirecTV Now. Penetration at DirecTV Now could be even higher, with HBO through DirecTV Now costing a third of HBO Now.

The number of HBO subscribers from vMVPDs is likely higher still. PlayStation Vue and Hulu Live both allow customers to subscribe to HBO. However, neither Sony nor Hulu have announced how many subscribers they have to their vMVPD services.

Around half of traditional pay TV cord-cutters sign up for a vMVPD. As cord-cutting accelerates, expect vMVPDs to continue strong growth for some time to come.

YouTube TV could deliver a big bump in subs

There is one major vMVPD that currently doesn’t have a reseller arrangement with HBO: YouTube TV.

Google does not report how many subscribers it has for YouTube TV. However, in the Q4 2017 Video Trends report from TiVo 8.5% of survey participants said they were using the service. 3.8% said they used DirecTV Now and 2.3% used Sling TV.

read more here: nscreenmedia.com

Top 10 pay-TV operators to lose $20bn

Despite adding 84 million subscribers between 2017 and 2023, subscription and PPV revenues for the world’s top 517 pay-TV operators will fall by $18 billion (€14.67bn) to $183 billion, according to analyst firm Digital TV Research. From the total, 29 pay-TV operators earned more than $1 billion in revenues in 2017, but this total will drop to 25 by 2023.

About $20 billion of the revenue losses will fall to the top 10 players; bringing their total down to $87 billion. The pay-TV revenue share for the top 10 operators will fall from 53 per cent in 2017 to 48 per cent in 2023.

All of the top 10 operators in 2017 will lose revenues over the next five years. In fact, 168 of the 517 operators (32 per cent) covered in the Global Pay-TV Operator Forecasts report will lose subscription and PPV revenues between 2017 and 2023.

Pay-TV subscriptions for 517 operators with 747 platforms [132 digital cable, 126 analogue cable, 286 satellite, 137 IPTV and 66 DTT] across 135 countries covered in the report will increase from a collective 880 million in 2017 to 967 million by 2023. These operators took 87% of the 1,006 million global subscribers by end-2017, with this level expected to inch up to 88% of the 1,100 million total by 2023.

“The good news is that 15 operators will add more than $100 million between 2017 and 2023, with China Telecom up by $1.4 billion,” advised Simon Murray, Principal Analyst at Digital TV Research. “However, five operators, including four from the US, will lose more than $1 billion in revenues. Seven of the top 10 losers will be in the US.”

Top 10 operators by revenues ($ million)

Operator Country 2017 Operator Country 2023
1 AT&T (total) USA 30,740 1 AT&T (total) USA 23,577
2 Comcast (total) USA 20,017 2 Comcast (total) USA 15,433
3 Charter merged (total cable) USA 15,589 3 Charter merged (total cable) USA 11,942
4 DISH Network (satellite) USA 12,310 4 DISH Network (satellite) USA 10,381
5 China Radio & TV (total) China 8,562 5 China Radio & TV (total) China 7,405
6 Sky (satellite) UK 5,258 6 Sky (satellite) UK 4,613
7 Verizon Fios (IPTV) USA 3,857 7 China Telecom (IPTV) China 3,753
8 Cox (total) USA 3,691 8 Sky (satellite) Brazil 3,662
9 Sky (satellite) Brazil 3,586 9 Verizon Fios (IPTV) USA 3,268
10 Altice USA (total cable) USA 3,190 10 Cox (total) USA 2,829

Source: Digital TV Research

Netflix Q1 exceeds expectations

Netflix’s Q1 numbers show that the OTT operator is growing as fast as ever. It added a net 7.4 million global subs during the quarter, only slightly down on the previous quarter’s record-breaking 8.33 million.

US new additions were also healthy at 1.96 million. Overall, this latest quarter year were the second-biggest ever, and the quarter-year exceeded all consensus expectations, and to a total of 125 million subs. International operations now generate 50 per cent of revenues, and 55 per cent of its subscribers.

Netflix generated $290 million (€234m) net income on revenue of more than $3.7 billion. That compared to net income of $178 million and revenue of $2.63 billion during the previous-year Q1 period.

Netflix’s CEO Reed Hastings and Chief Content Officer Ted Sarandos took the analyst call with Benjamin Swinburne of investment bank Morgan Stanley, and confirmed that they would be spending “upwards” of $8 billion this year on content.

As to the recent bundling of Netflix into the pay-TV operations of Comcast and Sky, Gregory Peters, Chief Product Officer, said: “We love the fact that we can work with these partners to access whole new groups of consumers, make it easy for them to find out about Netflix, to sign up and have a great way to access the service and watch more and more. So you’ll see us leverage that sort of evolving strategy not only in the markets that we’ve been in for many years, but also in these new markets.”

Netflix confirmed that it will be launching a dedicated service to mobile phones. Peters said: “We definitely want to have a mobile experience which allows us to access more of that market and access a group of consumers who basically only want to have their relationship with Netflix on a mobile device. And so whether that is making sure that our apps are lightweight enough so they load really quickly and have a great experience there, to making sure that our encoding is very, very efficient, so that even if you have a less-than-great network connection, you can still get a really incredible video experience on that mobile phone.”

read more here: advanced-television.com