30 ABR 2021

PREMIUM SVOD SERVICES CONTINUED ITS GROWTH MARCH IN Q1 2021

The Premium SVOD market continued its growth march in the first quarter of 2021, with total subscriptions up 24% year-over-year, and up 6% from last quarter, Antenna revealed in its latest report.

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The Premium SVOD market continued its growth march in the first quarter of 2021, with total subscriptions up 24% year-over-year, and up 6% from last quarter, Antenna revealed in its latest report.

The category of “Premium SVOD” has experienced a staggering amount of disruption in the 18 months since Disney+’s launch. Moreover, last quarter welcomed Discovery+ and Paramount+. Two years ago, Netflix and Hulu accounted for over three out of every four Premium SVOD subscriptions, but in the past two years, they have grown just 8%, and so now account for one out of two subscriptions.

The four other Premium SVOD services that were in-market two years ago — HBO Now (now HBO Max), Showtime, Starz and CBS All Access (now Paramount+) — still make up about one of four Premium SVOD subscriptions. But to maintain that share level in the face of new competition, they have grown 100% in the past two years, and now operate at much more substantial scale.

A major change has been the new services that have launched. Disney+, Discovery+, Peacock, and Apple TV+ now account for 22% of all subscriptions. In fact, Disney+ alone has accounted for 44% of all category growth since the first quarter of 2019.

To manage this more complex — and potentially more expensive — set of choices, consumers are starting by cancelling their traditional linear pay TV packages at record numbers. They are also becoming less loyal to their SVOD services, with one exception: Netflix.

An increase in average monthly churn for Premium SVOD services (excluding Netflix & Hulu) — from 5.3% to 7.0% in the past two years, was observed by Antenna. Hulu’s churn doubled over the same time period. While a variety of factors are likely impacting their churn — including aggressive promotional pricing offers, their Live TV vMVPD product, and participation in the Disney bundle — certainly competition plays a role.

Netflix, on the other hand, saw churn increase only 0.1% from the first quarter of 2019 to 2021. Furthermore, they lead the industry in what Antenna calls “resubscribe rate,”  meaning that when they do lose customers, they are more likely than competitors to win them back.

“It is an awful lot of change in eight quarters. Even more exciting — and daunting — is to envision what the market will look like at the end of the first quarter of 2023, as the recent entrants gain their footing, and the players settle into new strategies around programming, pricing, bundling and distribution,”  said Jonathan Carson, Co-Founder & Chairman of Antenna, and the author of the report.

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