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‘Subscription Fatigue’ Not Slowing OTT Proliferation After All: Research Firm

The popular “subscription fatigue” narrative is that consumers have topped out on the number of over-the-top services they’re willing to pay for and are now in pruning mode.

But Parks Associates—which was one of the first research outfits to put the notion of subscription fatigue into the lexicon—now says that the number of OTT services in the average home is still expanding, and it’s traditional pay TV that’s getting the pruning.

According to some of the latest Parks research, the percentage of broadband homes subscribing to pay TV dropped from 87% in 2014 to 79% last year. But the percentage of households subscribing to at least one OTT service increased from 55% to 64% over that span. And the amount of homes taking two, three or four OTT services also increased significantly over that time period.

Consumers, Parks said, are “not only willing to pay for a subscription, they are willing to pay for multiple services, even premium-priced services if value is perceived.”

This is a change of course from Parks’ previous position.

In September, Parks & Associates released a study suggesting the subscription OTT market had become “saturated.” Consumers weren’t necessarily tossing away subscriptions to popular platforms like Netflix, Hulu and Amazon Prime Video, Parks found, but they weren’t adding new services to their monthly expenses, either.

"In talking about market saturation in 2018, we were saying that household penetration had leveled off (% of households taking any OTT video service)," said Parks senior analyst Brett Sapington, explaining the firm's position. "We still think that there is lots of room for OTT to grow in terms of number of subscriptions per household. Our figures for number of services taken continue to increase, and the number of households with three-plus services continues to jump.

"So, we are not big believers in subscription fatigue in OTT," Sapington added. "Rather, consumers evaluate each service on its own perceived value rather than comparatively, and current pricing allows consumers to pack on more. I think that the launch of the new Disney and WarnerMedia services will prove that out (or not). We are looking for the average number of services per household to jump by ~1 service the end of this year.

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!