Just over two-thirds of Netflix users also have a pay-TV subscription, and about a quarter of them are thinking about cutting the cord.
Revenue from OTT services is set to nearly double to $51.1 billion globally during the next five years, according to the latest Digital TV Research report, which covers 64 countries. That growth is largely being driven by SVOD services like Netflix, which are capturing subscribers at a faster pace than many industry analysts expected.
Pay-TV's first quarter earnings reports showed no definitive evidence that cord cutting is about to go viral. But the signs are troubling. In fact, an examination of linear TV ratings leads to a conclusion that television's disrupted, on-demand future isn't just inevitable, it's already here.
Subscription video on demand services like Netflix and Hulu have seen their subscriber bases grow rather explosively, and ease-of-use for these platforms has always been given some of the credit. But the question has always lingered: How much digital piracy has resulted from the ease with which users can freely share usernames and passwords?
While the world of over-the-top distribution has often been discussed in monolithic terms, there are, of course, vast differences between ad-supported, short-form focused platforms like YouTube, and subscription-based, long-form oriented services like Netflix and Hulu.
Here at the INTX trade show, there is a lot of noise about the "user experience." Cable operators, technology vendors and others are desperate to make it easier for users to find and watch content. But the continued push for a better, faster UI seems misplaced at a time when YouTube is now the most watched television "channel" among 15- to 24-year-olds in Sweden and Netflix is streaming the best superhero TV show I've ever seen (Daredevil).
Netflix has asked the Federal Communications Commission to reject the $49 billion merger of AT&T and DirecTV. Netflix executives told more than 20 FCC staffers last week, "The proposed merger would make AT&T the largest (multichannel video programing distributor) in the country, and potentially lead to its becoming the largest (Internet service provider) in the country as well."
Despite ever-more-conclusive evidence that syndication sales to SVOD platforms is having an dramatic, ongoing negative effect on linear channels, Turner on Thursday announced a sweeping program rights deal with Hulu.
Netflix has incurred a huge influence in the decline of linear pay-TV. But acceleration of that impact will probably slow down, as the SVOD service is forced to infiltrate homes with less affluent and older consumers.
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