Netflix dominates UK streaming pack and could challenge Sky
30 grand income per hour of programming hits the spot for Netflix.
The latest research by S&P Global Market Intelligence’s Kagan group shows the UK streaming market is dominated by just three services, with the alpha being of no surprise.Kagan’s data illustrates that, at the end of 2018, 97 per cent of UK streaming TV was accounted for by Netflix, Amazon Prime Video and Sky’s NOW TV services.
Breaking that 97 per cent down sees Netflix dominating at nearly 60 per cent with Amazon Prime in second place with half that amount. NOW TV makes up 10 per cent of the streaming market.
“Since debuting in January 2012, Netflix has been leading the growth of streaming video,” writes, Michail Chandakas, Associate Research Analyst, in a blog post.
He expanded, “Its success lies in its timely launch, integration with pay TV providers and large scale investments in licensed and original exclusives. We believe Netflix is on its way to passing the combined number of Sky direct-to-home/OTT subscribers within 2019.”
That last statement is interesting as it speculates that Netflix may well soon surpass the combined subscriber numbers from Sky’s satellite and NOW TV services - something that must surely put Netflix in a strong position to deal with the upcoming challenges from streaming services soon being offered by big hitters such as Apple, Disney, HBO Max and NBCUniversal.
Chandakas calls the UK, one of the most developed OTT (Over The Top, i.e. delivered via internet) markets in Europe with 47.9 per cent of broadband households paying for at least one service. This matches data provided by Ofcom’s Media Nations UK 2019 report which pegged this figure at 47 per cent.
Kagan estimates that each OTT household subscribed to an average of 1.4 services during 2018 - again largely in line with Ofcom’s findings - a figure that has been rising steadily since 2013 and perhaps reflects viewer’s eagerness to experience the widest choice possible. The researchers state that this increase is slowing and will most likely be reinvigorated with the introduction of new services.
The report goes on to suggest that the broadcasting companies that make up the remaining 52.1 per cent of content provision for viewers have three options when faced with the launch of new international video players.
- Invest in a joint fund to launch their own streaming enterprise, which is of course what the BBC and ITV broadcasters have pursued with Britbox.
- Work with the global OTT providers on jointly produced projects which usually leaves the local broadcaster with the domestic rights for linear and OTT broadcast while the international rights remain with the global streamer.
- Lobby local authorities for stricter regulations regarding video streaming - something that could be viewed as penalising the consumer unfairly.
The report calculates the amount of income each hour of programming generates for the three main UK streamers and it shows that Netflix brings in over $30,000 for every hour of programming they deliver compared to $17,500 for NOW TV and $5,200 for Amazon Prime Video. This translates as Netflix having more room to spend on acquiring programming as it keeps growing its customer base at a given price point - note: this conclusion was based on 2018 data taken before Netflix's recent price rises. Amazon’s lowest revenue per hour of programming seems to back up its business model of using Prime Video to support its eCommerce ventures.
Source: www.broadbandtvnews.com, www.advanced-television.com
Image Source: Komando.com, Kagan Research
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