PORT WASHINGTON, N.Y., March 21, 2019 /PRNewswire-PRWeb/ -- Consumers today have a variety of choices when determining how they want to access TV programing. As is the case in the broader retail landscape, growth in direct-to-consumer (DTC) channel subscriptions* is particularly notable. Driven by the influx of new services, faster in-home broadband speeds, and TV-connected device adoption, DTC channel adoption rates grew three-fold over the last three years to reach 15 percent of U.S. households, according to The NPD Group.
In 2019, NPD expects growing consumer interest and new service launches will push the DTC distribution channel market to continued growth. In fact, nearly 9 out of 10 (87 percent) customers that are currently subscribers indicate that they are likely to add channels in the next year – but why and where will they choose to sign up?
While uptake of streaming video services are often linked to cord-cutting, subscribing directly to a channel as a means to replace cable ranks 16th out of the 20 reasons the new Direct-to-Consumer Video Online Study evaluated. Indeed, a majority of current subscribers, 66 percent, subscribe directly to channels in addition to their cable or satellite TV bundle. Affordability is driving adoption and that is the top reason cited for subscribing to à la carte TV channels, with the ability to subscribe only to the channels desired also among the top five reasons.
"In addition to what is driving adoption, it is imperative for players in this space to understand where consumers prefer to sign up. With the advent of the 'Channels Model,' consumers can now subscribe to only the channels they want and get the benefit of a single billing vendor and user interface," said John Buffone, executive director, industry analyst, NPD Connected Intelligence. "DTC channel aggregators such as Amazon, Roku, Hulu, Sling TV, and other potential market entrants, stand to gain a lot by garnering subscription revenue for managing DTC channel transactions."
The growth in this market will come from both current subscribers adding channels and new subscribers entering the fold. Looking at the combined group of current and prospective subscribers with a positive likelihood to sign up in the next 12-months, the most likely destination for subscribing to DTC channels is Amazon Prime Channels (31 percent). The second most popular choice is to subscribe directly from the TV channel's app (26 percent). Interestingly, prospective subscribers are even more likely than current subscribers to indicate they would use Amazon Prime Channels to sign-up.
*Direct-to-Consumer Video subscribers are defined as current subscribers to any à la carte TV channel that does not require a pay TV subscription from a cable or satellite TV provider.
Methodology
The NPD Group Connected Intelligence Direct-to-Consumer Video Online Study is based on consumer panel research that reaches over 1,000 U.S. consumers, aged 18+ from diverse regions and demographical backgrounds. This survey was fielded from February 6 through February 11, 2019.
About Connected Intelligence
Connected Intelligence provides competitive intelligence and insight on the rapidly evolving consumer's connected environment. The service focuses on the three core components of the connected market: the device, the broadband access that provides the connectivity and the content that drives consumer behavior. These three pillars of the connected ecosystem are analyzed through a comprehensive review of what is available, adopted, and consumed by the customer, as well as reviewing how the market will evolve over time and what the various vendors can do to best position themselves in this evolving market. For more information: http://www.connected-intelligence.com.
About The NPD Group, Inc.
NPD offers data, industry expertise, and prescriptive analytics to help our clients grow their businesses in a changing world. Over 2000 companies worldwide rely on us to help them measure, predict, and improve performance across all channels, including brick-and-mortar and e-commerce. We have offices in 27 cities worldwide, with operations spanning the Americas, Europe, and APAC. Practice areas include apparel, appliances, automotive, beauty, books, B2B technology, consumer technology, e-commerce, fashion accessories, food consumption, foodservice, footwear, home, juvenile products, media entertainment, mobile, office supplies, retail, sports, toys, travel retail, games, and watches / jewelry. For more information, visit npd.com. Follow us on Twitter: @npdgroup and @npdtech.
SOURCE NPD
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