Bigger is better, but content still king.
8 February 2018
The Mediavision Swedish TV Insight Q4 analysis, published Feb 1:st, once again points at the rapid growth of the OTT market. Viewing, subscribing households, market value – all major KPI:s of the OTT business are pointing in the same upward direction. As stated in the latest press release; yet another record level for SVOD was noted, with a 41% household penetration. Global (or, rather US) actors are still leading the game, with a combined market share of 65% for Netflix and HBO Nordic. And this is higher than last year – indicating some tough challenges for at least some of the locals going forward.
Looking at the consumers, fiction is still the most popular genre – by far – gathering nearly 50% of all time spent watching online video. And it may not come as a surprise that 80% of this viewing time is allocated to foreign content. Entertainment, bulk in traditional TV, is only a fraction in OTT and accounts for a modest 10% of all online video consumption. In contrast to fiction, local services are taking a big slice of the pie in this genre; approx. 70% of the OTT viewing in entertainment is in Swedish.
So, what could be the implications looking at 2018?
First, we already see an increasing supply of both local and international fiction. The market is more competitive and consumers more sophisticated than before. The global giants are directing larger investments into locally produced content, for instance Netflix’ Q4 report points at the around-the-globe success of local originals such as German Dark, Brazilian 3%, and Italian Suburra. In the pipeline for 2018 is more than 30 new local originals. The entertainment genre, though, appears to be significantly less interesting for the big dragons. This leaves room for local players. A not-so-wild guess is that traditional broadcasters will push all sorts of non-fiction genres during 2018. However, time spent on non-fiction in OTT, will most likely not be of any comparable size to traditional TV. A big question will also be how non-fiction can help drive consumption in general and subscriber numbers specifically.
To meet the increasing demand of insights regarding both viewing and subscriptions, Mediavision is now launching a new service The Inventory Insight. It will be key to fully understand how content and content inventory is correlating to viewing and subscriptions. The Inventory Insight is a quarterly analysis covering all content across AVOD, SVOD and TVOD across the Nordics – to facilitate strategic positioning on the increasingly competitive market of online video.