Seeking to keep its much larger SVOD rival, Netflix, within shouting distance, Hulu is contemplating the inclusion of a higher-priced, ad-free service.
Netflix added 3.3 million new subscribers during the second quarter (that's 900,000 U.S. subs and 2.4 million internationally), figures that raise the company's global customer base to 65 million. Investors sent the company's stock up 14 percent on the news--and, according to the Wall Street Journal, analysts too cheered the results by raising their price targets on Netflix shares.
Charter Communications has gained a powerful ally in its bid to acquire both Time Warner Cable and Bright House Networks: In a new filing with the FCC, Netflix agreed to support Charter's purchase of TWC and Bright House in exchange for free usage of Charter's network through 2018.
While conceding his own companies "missed the boat a little bit" in letting upstart Netflix become the dominant force in over-the-top distribution, Liberty Media Chairman John Malone said his cable holdings, which include the burgeoning Charter Communications empire, are still well-positioned in an OTT future.
In one of the most thorough studies yet on Netflix viewing habits--and more specifically, their effect on pay-TV use--The Diffusion Group found that cable, satellite and IPTV use among Netflix homes declined marginally from 2012 to 2015.
While SVOD platforms like Netflix, Hulu and Amazon Prime Instant Video have been lauded for easy, immediate customer sign-up processes, the fact that exiting these services is just as convenient results in churn that is significantly higher than what is found in pay-TV.
The channel known for such TV movies as Kept Woman, Stalked by My Neighbor and Her Infidelity is launching its own SVOD service.
Some call it "network flow," but I've also heard it referred to as the "network effect." It's how programmers monetize their expensive hits. After all, what incentive does ESPN have for paying the NFL $1.9 billion a season for TV rights if it can't ubiquitously brand its coverage and drive viewership to other programming?
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.