Can you remember what watching TV was like before the arrival of Netflix or Amazon’s Prime Video? Or, if you live in these countries, can you remember what your viewing habits were like before the release of local services like BBC iPlayer in the UK, Hotstar in India, Claro TV in Mexico, and Maxdome in Germany? If you’re anything like ordinary audiences, your usage of these services is probably increasing. In our recent survey of 3,000 current VOD users in the UK, Germany, Mexico, and India, over half say that their use of subscription services has been increasing over the past year.
But can you also imagine what you’ll do when even more choices come onto the market? With Disney and Apple launching new services shortly, we asked audiences in key international markets about their perceptions of current and future streaming services to understand if an already disrupted market is about to be disrupted again.
More, More, More: For Millennials, One Isn’t Enough
When comparing 16-34s and over 35s, there are some clear differences in behaviour. On an aggregate level, 16-34s are more likely than 35-54s to have two or more SVOD services. However, this is not consistent across all four countries, with 35-54s in Mexico more likely to have two or more streaming services.
The Unbreakable Netflix?
When it comes to streaming in the UK, Germany, and Mexico, there’s one company leading the pack: Netflix. In these three markets, between 67% and 92% of respondents claim they currently use Netflix while between 35% and 60% claim current usage of the closest competitor, Prime Video.
To understand Netflix’s multi-market dominance, we investigated its brand and content perceptions. And although Netflix has a clear lead across these measures, relative strength and attributes of the competitive set vary by market.
Amongst those aware of the service in Mexico, a Netflix stronghold, the streaming service is well ahead of all competitors on all measures.
Moving to the UK, Netflix’s perceptions clearly outweigh the competition, but the picture is more nuanced. BBC iPlayer scores well in terms of ease of use and family-applicability but dips relatively in terms of trying new things. Other broadcaster-backed streaming services are less strong, and the field is cluttered with ‘secondary’ competitive services that are tightly grouped.
In Germany, perceptions of Netflix, whilst remaining ahead, are much closer to Prime Video. They are closest on their ability to deliver ‘something for everyone’. Although unlike in the UK, brand perceptions of locally-backed competitors are significantly further behind.
In India the picture is quite different. Here, the Disney-owned local provider Hotstar dominates reported usage (76% claim to currently use it), followed by Prime Video (65%) and Netflix (61%). Brand perceptions of the relative services are also closer to Netflix. Netflix does, though, appear to have the potential to differentiate from the competition with an edge over other services on quality of programming and being in tune with popular culture.
Amazon Primed to Take on the Market Leader?
In countries such as Germany and India, Prime Video’s brand perceptions are relatively close to the market leader, Netflix. Prime Video is seen as the second choice SVOD service across markets both in terms of ‘currently using’ and brand perceptions.
Three key points help to contextualise Prime Video’s position relative to Netflix in these countries:
- Firstly, Prime Video is strongest amongst the 35+ audience. Indeed, in Prime Video’s strength markets of Germany and India, reported usage amongst this relatively older demographic exceeds that of Netflix.
- However, Prime Video’s usage frequency is a relative weakness in comparison to Netflix. Aggregating the markets together, only 38% of Prime Video users claim to use it daily in comparison to 58% for Netflix users. Although, notably, usage a ‘few times a week’ is higher for Prime Video (42% for Prime Video vs. 34% for Netflix).
- Lastly, Prime Video is seen has having ‘high quality content’, and the gap here is comparatively small to Netflix. However, Prime Video falls behind when it comes to having ‘unmissable programmes’.
Disney Appears Well Set
But what happens when worldwide brands look to enter the streaming marketplace? That’s something that we will discover when Disney and Apple enter the SVOD market later this year with their own platforms Disney+ and Apple TV+.
We didn’t provide our respondents with detailed information on these forthcoming services, but on a conceptual level, interest in both Apple and Disney’s services is high, although Disney+ appears to be in a stronger position than Apple TV+. Intended uptake is 28% and 23% respectively. This is relatively consistent, but again India is the exception, where intended uptake for Apple TV+ is two percentage points higher than for Disney+ (34% and 32%).
Notably, potential Disney subscribers are a desirable demographic. They’re more likely to be:
- Younger skewing (31% interest amongst 16-34s vs. 25% amongst those 35+)
- Financially comfortable (62% of potential subscribers self-describe as ‘financially comfortable’)
- Parents of young children (5 percentage points higher than VOD users as a whole)
- Heavy TV users (37% of intenders watch four or more hours a day)
- Film lovers (13 percentage points higher than VOD users as a whole)
Apple’s Awareness Challenge
As this early stage (and we should note that the survey was fielded in April and May of 2019), Apple appears to face an awareness challenge. Looking at UK VOD audiences, it’s notable that 30% say that they’re unaware of Apple TV+’s forthcoming launch, with all markets having relatively lower awareness in comparison to Disney+.
When considering who is likely to subscribe to Apple, there are a lot of similarities to Disney+ intenders: heavy TV consumers, financially comfortable, and more likely to be a parent. But there are some distinctions between the two groups:
- Apple TV+ intenders are slightly older than Disney+ intenders
- They are more likely to be parents of children over 12 years old (5 percentage points higher than Disney+ intenders)
- They are more engaged with audio streaming services (10 percentage points higher than VOD users)
The Battleground: Amazon Vs Apple and Netflix Vs Disney?
The fact that both Disney+ and Apple TV+ potential subscribers are more likely to be financially comfortable could suggest that they have the capacity to add services alongside their existing subscriptions. Moreover, half of Apple TV+ potential subscribers also intend to subscribe to Disney+. And of the half that do not, 57% already have more than one SVOD subscription.
But should consumers hit a saturation point and begin to choose, there are some interesting findings that suggest which companies may be competing for the same audience:
- Those who intend to subscribe to Disney+ and not Apple TV+ are more likely to already subscribe to Netflix (80% compared to 73% of VOD users).
- And for those that intend to subscribe to Apple TV+ and not Disney+, this group is more likely to be existing Prime Video users (56% compared to 51% of VOD users).
When looking at the two groups, there is also an overlap in demographics, suggesting that competitive groupings may fall into two categories, with Netflix subscribers and Disney+ intenders both over-indexing amongst 16-34s and Prime Video and Apple TV+ relatively stronger amongst the 35+ audience.
What Does This All Mean?
Of course, it’s always difficult (and dangerous!) to play crystal ball. Not least, the streaming content and competitive landscape will continue to shift with forthcoming streaming services from Comcast, Time Warner, and others. But our data here and broader work point to some initial indications:
- Netflix’s delivery of high-quality, unmissable content has seen it rise to the position of market leader, particularly in the UK and Mexico. But, as we see across international work, one size doesn’t fit all, and even the likes of the UK could be challenging for the market leader if local services are able to successfully aggregate (for instance under the forthcoming BritBox service).
- In India and Germany, Prime Video is much closer to Netflix, driven by the 35-54 audience. However, the signs here are that Prime Video needs to push higher frequency of engagement, building on perceptions of high-quality content to establish that it has shows that are unmissable and buzzworthy.
- Disney+ looks to have good potential amongst younger, affluent audiences, with its film franchises and traditional child-friendly content proving to be appealing. This places it in a strong position with high levels of intended uptake and running into a potential battle with Netflix given cross-over in demographics and subscriber base.
- For Apple TV+ intended uptake is slightly lower than that of Disney+, primarily due to lower awareness than Disney. But its potential audience is also desirable with relatively stronger appeal amongst over 35s, potentially pitching Apple into a battle with Prime Video.
Our data suggests that there is an appetite for new entrants, particularly amongst younger audiences who are more predisposed to having multiple streaming accounts. However, there will likely be a saturation point due to time and cost limitations.
As such, it is possible that we may see a temporary fragmentation before the market consolidates or even third-party bundling of services taking place. But for now, it certainly looks like the disruptors will face disruption, with international markets continuing to develop their own characteristics.
For more information about this study or a presentation of key findings, drop us a line here and we’ll be in touch!