UK television audiences are preparing to feast on holiday viewing this Christmas TV and Over-the-Top (OTT) TV services are top of the menu, as the proportion of British consumers subscribing to paid video-on-demand services has soared from 19 per cent to 34 per cent over the last year, according to new research from subscription, billing and CRM specialist Paywizard.
With its tradition of festive TV specials, the UK Christmas television schedule is jam-packed with special programs and the research shows 71 per cent of Brits intend to watch more TV during the holiday period – making it the binge viewing leader of the six key markets surveyed for the global study of Christmas TV trends.
As the most valuable pay-TV market in Europe, the UK has been an early adopter of pay-OTT services and shows no sign of slowing down. The research reveals 18 per cent of UK consumers are planning to take an OTT subscription for the first time ahead of the 2016 holiday season and 7 per cent are expecting to add an extra pay-OTT service – a combined total of 25 per cent, up from 20 per cent in last year’s survey.
The survey of 6,200 consumers worldwide – including 1,044 Brits – was commissioned by Paywizard and conducted by Research Now. It reveals 71 per cent of UK consumers now pay for some form of TV service, including cable, satellite or an internet TV operator such as Netflix, Amazon Prime Instant Video, or Now TV.
Subscriptions on the rise
The Christmas TV rush promises to boost the overall number of OTT subscribers this holiday season, as the percentage of consumers expecting to take an online pay service for the first time (18 per cent of all respondents) added to the proportion who are existing subscribers (34 per cent) brings the percentage total of UK consumers projected to have a pay on-demand service going into 2017 to 52 per cent.
However, this expected lift in OTT subscriptions may be short-lived, as the survey also found that 55 per cent of first-time UK Christmas TV subscribers intend to cancel within six months, indicating a strong dip-in, dip-out attitude towards pay-OTT services. This is slightly higher that the global figure of 50 per cent.
Bhavesh Vaghela, chief marketing officer at Paywizard, notes, ‘Even with a single dominant satellite operator, cable services provider and world leading public broadcaster, UK audiences have embraced pay-OTT services, with adoption almost doubling in a single year. But it is also clear OTT operators must fight to retain any gains they make this Christmas.’
A range of devices to watch Christmas TV
In terms of device, marginally more people plan to do their Christmas TV viewing on a traditional or smart TV than last (82 per cent versus 78 per cent), while the same proportion as in 2015, 40 per cent, intend to use a mobile device for at least part of the time. The proportion aiming to use a streaming device, such as Roku, Apple TV and Chromecast, rose slightly by three per cent to ten per cent.
Local players challenging the global brands
While international giants Netflix and Amazon Prime are driving OTT uptake, local challenger Now TV is also growing strongly, with 19 per cent of those who plan to take a digital service for the first time this Christmas intending to go with it.
Vaghela observes, ‘New entrants such as Now TV and BT have both come into the market and gained significant uptake, which demonstrates there is tremendous potential for local challengers to carve out sustainable businesses and compete with the global brands.’
He concludes, ‘Service providers cannot expect growth to last for ever and content is not enough to build brand loyalty. Elements such as customer service, provider recommendations and package flexibility will increasingly become vital to cementing subscriber loyalty and reducing churn, which is much higher for pay-OTT than traditional cable and satellite services. ‘
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