TVOD: the crown is there for the taking
As Decipher launches its Wave 5 Mediabug research, Matt Walters, senior consultant, talks us through the competition in the electronic sell-through (EST) market.
It’s been a busy few days for Google Play, Google’s digital media store. First came the announcement last week that Google Play was to be added to the “channels” on Roku’s streaming boxes in the US, UK, Canada and Ireland. Shortly following this was the company’s Google+ post in which it revealed that Google Play’s movie service had been rolled out to nine more countries (many in Eastern Europe, and three – Iceland, Macedonia, and Bosnia – where they’ve got in ahead of iTunes).
And now Decipher’s latest wave of Mediabug research has thrown up an interesting perspective on a service that’s not only finding its place but performing well in the UK TVOD (transactional video on demand) marketplace.
Historically, Apple and iTunes have assumed a position of strength in TVOD, but our latest research suggests Google Play is hot on its heels. In MediaBug Wave 5, measuring claimed usage of electronic sell-through (or EST) in a particular month in Q3 2014, 12% of online consumers claimed to have used iTunes and 8% claimed to have used Google Play – unremarkable in and of itself.
However, place that in its short-term historical context and things get more interesting. In Q1 2014, the respective data points above read 11% and 5%. Cast back twelve months to Q3 2013 and it read 13% and 2%.
Claimed usage of Google Play for video EST has grown four-fold in 12 months, whilst claimed usage of iTunes has declined (albeit minimally). If the trends continue at the same rate into 2015, Google Play will lead the EST market by this metric within a year.
Let’s put TVOD in its correct perspective before we go any further; compared to other forms of consumption (live, catch-up, VOD and subscription streaming – or SVOD – services), it remains very much a niche activity, and recent numbers bear this out.
According to my old colleagues at Ofcom, only 24% of consumers have a DTO (download-to-own) collection – that is, TV episodes or films sitting on their device’s hard drive, having been purchased through a storefront such as iTunes.
TVOD isn’t just about download-to-own – it’s about download-to-rent (DTR), too – and this too remains a small-scale activity. Again using Ofcom data, DTR tends to be an activity which only one in ten of us do monthly, and it’s heavily skewed towards younger demographics. Our own Mediabug research adds to the picture: only 21% of online consumers have ever paid to rent online.
The tiny scale of TVOD as a consumer activity doesn’t make Google Play’s apparent rise any less interesting, though. Among its drivers are Google Play’s growing catalogue, resting on a firm foundation of content rights agreements with studios of the kind that saw it – quite significantly perhaps (it’s certainly the exception) – reach a tripartite agreement with Disney and Apple earlier this week to allow users’ Disney content to be interoperable between iOS and Android devices.
Large rights deals with the likes of CBS, Viacom, MGM and Paramount preceded this, increasing the range and choice of content open to potential consumers. Allied to this is Google Play’s availability, and increasing availability (as evidenced by its addition to Roku), across a multitude of connected devices.
This is not to argue that Google Play’s competitors lack in either of these departments – it is more to make the case that these two things combined have given Google Play a greater coherence as a proposition (both consumers and to content rights owners) than it had in its fragmented past as a disparate offering under the banner of the “Android Market”.
From a UK perspective, a few other names are jockeying for consumers’ attention in the TVOD marketplace. Blinkbox is one of them. Amazon Instant Video is another.In terms of monthly claimed EST usage, iTunes is on 12%, Google Play 8%, and Amazon Instant Video is just a percentage point behind on 7% (Blinkbox is on 6%).
Amazon has pursued what can be characterised as a “device agnostic” strategy with Instant Video, spreading itself across mobile devices (in the iOS and Android environments, at least – Amazon has been rumoured for a while to be working on a Windows Phone-compatible app), smart TVs, Blu-ray players, games consoles and streaming devices.
Instant Video starts from a strong base, and – with its prominence on Amazon’s recently launched Fire TV boxes and its operating system neutrality (it’s available across iOS and Android – the best of both worlds, so to speak) – it’s not inconceivable that it could take the lead.
Much of the recent industry attention, perhaps theatrically and disproportionately so, has been given over to who will gain ground in the “access”, subscription VOD stakes – a battle royal, if it’s to be believed, between Amazon and Netflix. There’s just as intense and interesting a battle happening elsewhere, this one for the digital “owner”, and for the credit card in your wallet. It seems the UK TVOD landscape is a little more open, and that there’s a little more to play for, than perhaps any of us had appreciated.
Mediabug Wave 5 is now available.
Matt Walters is senior consultant at Decipher, a media consultancy providing board-level research and strategic advice. Decipher specialises in understanding consumer uses of new digital technologies, emerging marketing and content business models, and new commercial structures for media and entertainment.