Streaming Video Services Are Causing Drop In TV Network Subscriptions, Says NPD Group

There are many subscription-based video streaming services available, ranging from the popular staples of Netflix and Amazon Prime to the somewhat less popular offerings like VUDU. These services are often relatively inexpensive, and can be watched on many devices, ranging from smartphones to televisions, making them attractive on many scales. According to an NPD Group report, the popularity of these services can be seen in their effect on subscription television networks: a 6-percent drop in two years.

Officially referred to as "SVOD", which stands for Subscription Video On Demand, these services have seen a 4-percent increase in households in the United States, while at the same time premium television networks, including the likes of HBO and Showtime, have seen a larger 6-percent drop. Working the numbers out, last year — as of August — 27-percent of households in the United States subscribed to some SVOD services, while 32-percent subscribed to premium television channels.

Not surprisingly, Netflix is the dominant SVOD, while Amazon Prime and Hulu Plus are also big contenders, and both are seeing the most growth benefits, according to the report. Since 2012, NPD says the overall digital-video transaction picture saw a rise of 3-percentage points, covering a span of 70-percent of home video transactions last year.

Said NPD's Senior Vice President of Industry Analysis Russ Crupnick: "As SVOD services have gained momentum, it's clear that some consumers are trimming their premium-TV subscriptions. As SVOD increasingly strives to become a channel itself, viewers might consider it to be an adequate substitution for other premium channels, or perhaps they are switching to economize on their time and money spent."

SOURCE: NPD