What Features Do People Value Most In Video-On-Demand (VOD) Services?

Video Streaming wars will continue to heat up in 2020

Five weeks after the launch of Disney+, the video streaming wars continue to heat up.

The new streaming services’ mobile app surpassed 22 million downloads in its first four weeks, and averages 9.5 million daily active users to date. What’s more, it already has a 5.8% longer average session duration than streaming giant, Netflix.

Despite the recent Disney-FOX merger, some hit FOX Entertainment shows remain separated – including Family Guy and Bob’s Burgers. Plus, new series such as Deputy and Flirty Dancing will be exclusively available on FOX.

Companies are spending big to win in the VOD space

Between the increasing number of companies entering the video streaming space in early 2020 (like NBC’s Peacock), the big-budget original series premiering on OG networks (Like FOX’s Deputy), and enticing subscription bundles (like Spotify +Hulu) – there are a variety of factors influencing where VOD customers will decide to occupy their attention and their wallets in the new year. And companies aren’t shying away from spending to win in the VOD space.

While bingeable content is a given, What other, non-content features do people value most in a VOD service?

With so many head-spinningly different strategies used by entertainment companies, (pricing tiers, device support, ad-supported content, download functionality and more) industry marketing executives might wonder – what features do people value most? Prioritizing the ‘right’ features is of critical importance to stay competitive in the coming year.

What the Data Says

EMarketer put out a report last month that showed that the #1 feature that would make internet users more likely to buy a subscription is ad-free membership options – followed by bundled/discounted streaming services. On the flip side, a significant number of respondents also indicated that discounted membership options that include ads would also influence their buying decisions.

The takeaway being, VOD users want control (one way or the other) over:

  • How much they pay for all of their subscriptions, total
  • And how many advertisements they are exposed to while on a streaming platform.

Hulu is a good example of using different pricing tiers based on users’ exposure to advertisements, and HBO Max is rumored to be rolling out a lower-cost ad-supported tier in 2121. Yet, most SVOD services – like Netflix and Amazon Prime Video – have communicated that they are not interested in creating lower-cost/ad-supported membership plans any time soon.

Why this matters

While researchers expect the US demand for VOD services to increase over the next five years, the fact remains that users are only spending time within their three (or so) favorite streaming apps.

According to a recent survey discussed on FOX Business, more than half of U.S. households are subscribed to Netflix, more than a third are subscribed to Amazon Prime, and more than a quarter are subscribed to Hulu. With these three companies having such a stronghold on the market, it may be difficult to get consumers to shell out more cash for new players.

According to a recent survey discussed on FOX Business, more than half of U.S. households are subscribed to Netflix, more than a third are subscribed to Amazon Prime, and more than a quarter are subscribed to Hulu. With these three companies having such a stronghold on the market, it may be difficult to get consumers to shell out more cash for new players.

Statista predicts increased VOD users in the US over the next five years.

These stats, paired with the fact that pay TV households are predicted to steadily decline over the next five years, illustrates the need for VOD companies to really nail subscriber preferences to be successful.

Conclusion

It will be interesting to see how SVOD companies’ platforms, pricing, and content will evolve over the next year. Feel free to share your thoughts in the comments below.

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