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What about pricing of SVOD services? | Mediavision | Affärsutveckling och strategi för medieindustrin

What about pricing of SVOD services?

Netflix has announced a price hike in the UK – up to +20 percent. Prior to this, the service also raised its prices in the US in January (roughly the same level). A growing content spend, driven by increased competition over consumers, is said to be the main reason. Interestingly, this move pushed the share price of the company, up from $349 last Wednesday to $353 yesterday (Tuesday May 4).

The global streaming market value is estimated to reach $125bn by 2025 (Wired); driven by a few actors with very deep pockets, heavily spurring the competition. And the Nordic region is definitely in the forefront of this battle. SVOD market penetration has surpassed 50% in all Nordic countries and stacking is reaching new heights, also in a global comparison. Strong local players, such as ViaplayC MoreTV2 Play (Denmark) and Sumo (Norway) are pushing both awareness, ARPU and consumer behavior.

The appetite for paid streaming services among Nordic households, is also proven in the strong growth; +800 000 subscribing SVOD households year-on-year. Even though it could be expected that the penetration rate eventually will slow down, Mediavision estimates that the number of subscriptions per household will continue to increase going forward. The Nordic average is currently 1.7 SVOD services per subscribing household. Add to this that telcos and distributors also will bundle streaming services – and we can foresee a continuous strong market development.

In this, pricing is obviously key. Disney has communicated a substantially lower price level (half) than Netflix, likely as a competitive tool. To any consumer, pricing is an important factor when allocating media spend. Today, the average Nordic household spends approx. €35 on pay TV (traditional + OTT). Netflix is obviously trying to get a bigger piece of the pie.

Mediavision blogs:

Who will win the Nordic streaming war?
Competition on the Nordic streaming market is ramping up with several new services about to launch. Content investments are escalating and only partly offset by price increases. In the US, Netflix recently announced +13-18% on subscription fees.

Mediavision press releases:

10 million streaming subscriptions in the Nordics
Streaming video continues to grow rapidly in the Nordics, Mediavision concludes in its recently published analysis on the Nordic TV and video market. An increasing number of consumers subscribe […].

Industry news:

Netflix has announced a price hike for subscribers in the UK, prices are to increase by up to 20 percent. The cheapest basic plan which allows standard definition viewing on a single device remains unchanged at £5.99 per month.
Amazon is considering acquiring the mobile operator Boost Mobile from Sprint according to Reuters. Sprint needs to offload Boost Mobile in order to see its fusion with T-Mobile US get approved, Amazon is allegedly interested.
In a move to strengthen the diversity of film on offer in Danish cinemas the Danish Film institute provides support for cinemas with a focus on artistic films. 11 cinemas have been gifted a total of DKK2.15 million.
Youtube takes additional steps to ensure children aren’t targeted by predators on its platform by banning kids from live streaming without adult supervision. In February Youtube also announced it will disable the comment section on nearly all videos featuring kids.
According to Financial Times Facebook has entered into negotiations with the CFTC regarding the launch of a crypto currency. Facebook allegedly wants to launch its own currency in order to facilitate transactions between users of Messenger and Whatsapp.
Google’s Nest Hub which is a combination of a smart speaker and a touch screen has launched in Sweden. Nest Hub has the same functionality as the Google Home smart speaker through Google Assistant paired with a touchscreen for visual aid.
 Danish mobile operator Telmore has entered a partnership with NENT Group to offer Viaplay to its customers. At present Telmore has roughly 200,000 customers with access to its online video service Telmore Play.

Mediavision in the news:

Research from Nordic analyst Mediavision has found that streaming video continues to grow rapidly in its home region, adding 800,000 new subscribing households over the last year.
Nordens invånare har nu tio miljoner streaming-abonnemang, en ökning med 800 000 stycken sedan förra våren. Detta enligt Mediavision som har gjort en analys på området.
Marknaden för streaming växer så att det knakar i Norden. Enligt färska siffror från Mediavision så ska antalet hushåll som nu har en streamingtjänst ha ökat med 16 procent över året, vilket innebär att 5,8 miljoner nordiska hushåll […].
The number of Nordic households subscribing to video on demand services rose by 800,000 between spring 2018 and spring 2019 to 5.8 million homes, according to consultancy Mediavision.

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