Market-expanding disruption ahead for streaming services

A recent HarrisX Overnight Poll survey finds that new entrants to the SVOD market will redraw the OTT landscape. Perhaps the most notable rookie will be Disney+ as the new streaming service tops preferences for SVOD leaders.

In fact, 28% of current streamers say they will likely sign up for one of the upcoming streaming services, with 21% saying they will sign up for Disney+, which includes Hulu and ESPN+ as a part of its bundle. HBO Max follows Disney+ with 11% saying they will likely sign up for the service while 10% say they will sign up for NBC.

This potential disruption will likely expand the market as existing subscribers intend to add to their current services. For instance, about 30% of existing customers of HBO Now and HBO Go intend to sign up for HBO Max. This up-sell may indicate retention and revenue growth opportunities for other streamers like AT&T TV Now, and Hulu (included in the Disney+ bundle, along with ESPN+).

In this new landscape, content, not cost, will drive adoption of streaming services. When we asked respondents what most excited them about the new services that are rumored to be released later this year and in early 2020 we found that 34% are excited about the library of new movies that Disney+ will offer, 23% said the original content at HBO Max, and 21% said the new tv shows at NBC. This is higher than the 16-19% of respondents who were most excited about the cost of the service for Disney, HBOMax and NBC respectively.

Not only will this content drive adoption, but these new services will have broader appeal. The new entrants to the streaming world, like Disney + and HBO max, will attract demographic groups that are less likely to be similar to today’s body of SVOD subscribers, especially within minorities and older millennial households. Of those likely to sign up for Disney+, 21% are Hispanic and 20% are African American, while only 17% of current subscribers are Hispanic and 11% are African American.  In terms of age, 25-36-year-old subscribers make up a quarter of current subscribers, while 37% of older millennials plan to sign up for Disney+.

These numbers suggest a larger, content-driven subscriber community with an anticipated shift in demographic make-up.  

 

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