New study findings from researcher GfK show that, despite larger user bases, video-on-demand (VOD) offerings from pay-TV providers are losing their war against streaming services like Netflix, Hulu Plus and Amazon Prime.
The report, How People Use® Media: TV Everywhere/VOD, shows that 56 percent of consumers in homes with cable, satellite or telco TV service say they use VOD or a TV Everywhere-type offering from their TV provider. By contrast, 41 percent of the same group say they use a subscription streaming service.
In terms of customer satisfaction, however, streaming services are the clear favorite, rated “better” than VOD by 44 percent of those who use both; by comparison, 27 percent prefer VOD, and 29 percent say the two are equal.
But there is a silver lining for TV service providers: Those who use VOD more often like it much better. Among users of both service types who turn to VOD at least once a week, on-demand becomes the favorite – preferred by 43 percent, versus 30 percent for streaming services.
“Pay-TV providers are getting sampling for their VOD services but they need to gain repeat users to start winning the perception battle,” says David Tice, senior vice president of GfK Media and Entertainment. “Consumers are open to considering alternatives to Netflix; but a lack of education and of effective marketing are letting these key pay-TV assets languish in the shadows.”
Similarly, perceptions of the “variety and choice” of programming available via VOD are dramatically more favorable among those who use it more frequently. Among the once-a-week-plus user group, VOD is perceived as essentially equal to Netflix and similar services in terms of viewing choices; 57 percent cite VOD as having “excellent” or “very good” variety, versus 55 percent for paid streaming. But those who use VOD less than once a week see the streaming services as highly superior in choice – 67 percent versus 28 percent.
In contrast, another type of service, TV Everywhere, is having a notable and growing impact on subscriber churn for pay TV providers. Among users of TV Everywhere in pay-TV homes, 28 percent feel more satisfied with their pay-TV service (up from 24 percent last year) and 33 percent are less likely to change pay-TV providers (up from 25 percent last year).
This positive assessment is even more striking among those who are users of subscription streaming services – a group considered more at risk of becoming cord-cutters. Over one-third (35 percent) of this contingent are more satisfied with their pay-TV service, and 39 percent say they are less likely to change providers.
How People Use® Media: TV Everywhere/VOD is based on interviews with 1,007 persons ages 13 to 64 in pay-TV homes.