Kantar, the world’s leading data, insights and consulting company, today revealed some fascinating insights around the audio and video streaming markets:
- Spotify secured 29% of new audio streaming subscriptions in the 3 months to October 2019.
- Pandora is the USA’s clear #2 service with 18% share followed by Amazon Music with 12% and Apple Music on 11% share.
- 61% of subscriptions in the quarter were first-time subscribers, 20% were second or more subscriptions
- 11% of subscriptions in the quarter were ‘switcher’ subscriptions where an existing subscription was cancelled to fund the new subscription – far ahead of 4% switching seen in video streaming market.
- Spotify lead amongst major players in customer advocacy with a Net Promoter Score (NPS) of +54. Unlike its video service, Amazon Music has the lowest NPS of the tier-1 services with an NPS of +28.
- Netflix secured 23% of new Video on Demand subscriptions in the 3 months to October 2019, closely followed by Hulu with 20% share.
- 56% of new VoD subscriptions were ‘stacked’ 2nd or 3rd subscriptions,
- 30% were 1st time subscribers – of whom 31% chose Netflix as their first streaming experience.
- Netflix is tied in first place with HBO Now for customer advocacy – a key stat for retention and growth.
- Subscription fatigue hasn’t kicked in yet, with average consumers holding almost 4 video subscriptions and less than two audio subscriptions.
- Binge watching is a mainstream viewing habit.
These are some of the initial findings from Kantar’s new Entertainment On Demand service launching today in the USA. Entertainment On Demand is the newest offering from Kantar. The service is designed to help the music industry and investors understand the full consumer journey for digital video and music subscription services, and is based on a longitudinal panel of 20,000 consumers and boosted by 10,000 consumer interviews each quarter, including at least 2,500 new subscriber interviews.
Kantar Entertainment On Demand is delivered by the same team that provides the world’s leading mobile phone manufacturers with global mobile phone purchasing and usage trends. Entertainment On Demand is the only subscription service providing both quarterly installed base and new subscription market share alongside deep analysis on purchase motivations, customer experience, and diagnostics on ‘at-risk subscribers’ as well as guidance on acquisition and retention strategies.
Entertainment On Demand will provide fast, sophisticated and accurate research into behaviours like purchase triggers, post-purchase usage, loyalty and the customer experience, providing clients with a deep understanding of the reasons behind consumer subscription choice. Organisations will be able to use the service to help maximise their subscription sales, increase customer retention rates and refine their marketing strategies. Initially launching in the US in March 2020, Kantar Entertainment On Demand will also be available in the UK, Germany, Australia and Japan in the second half of the year.
Additional findings from the first quarter’s audio subscription behaviours in the U.S. reveal:
- Across the industry the service website is the most influential pre-purchase touchpoint, followed by advice from friends and family – emphasising the importance of subscriber advocacy in future growth.
- For Spotify, Podcast variety and ease of creating personal playlists are significant competitive advantages versus their competitors. Pandora’s discovery algorithm is hotter than any other service.
- Amazon Music leads in value for money perception – but lags in artist variety.
- Amazon Music drives significantly higher usage through Virtual Assistants than Spotify.
- Apple Music has a strong reputation for streaming sound quality.
Additional findings from the first quarter’s video subscription behaviours in the U.S. reveal:
- Amazon Video ranked third in new subscriptions followed by HBO in a distant 4th with 6% share of new subscriptions.
- Netflix is king of the ‘gateway subscription’ with 31% share of first-time subscribers. 43% of new Netflix subscribers were signing up to their first video subscription service. Followed by HBO Now, for whom 32% of new subscriptions were first-time subscribers.
- Hulu leads the market in ‘Stacked Subscriptions with 67% of new Hulu subscribers already subscribing to another service.
- HBO Now and Netflix are tied for customer advocacy levels at a very impressive NPS of +63. Amazon Prime Video and Hulu are 10 points lower.
- Hulu leads on ‘binge watching’ with 86% of their subscribers identifying it as important, followed closely by HBO Now.
- Subscription Fatigue is not yet a major phenomenon in the industry. Overall 4% of new subscriptions were accompanied by the cancellation of another subscription. 6% of subscribers picking up Amazon Prime said they had simultaneously cancelled another service. There is already a significant groundswell – with 52 already saying there are too many subscription services.
- With a net satisfaction of just +8% in ‘Value for Money’ – significantly lagging other subscription services - HBO Now may face future challenges in subscriber retention despite its overall strength in customer satisfaction.
- Amazon Prime leads the pack in net satisfaction with the variety of TV series and Films while HBO has a marginal lead over Netflix on satisfaction related to original content.
- Free trials and new smart TV purchases are the primary trigger for new subscriptions.
- Netflix is winning the interface war, leading in ease of being able to pick up films/tv where left off, search functionality and suggestions of what to watch.
Dominic Sunnebo, Senior Vice President at Kantar, Worldpanel Division, comments “As we observed in our 2020 Media predictions, the streaming wars are heating up. Entertainment On-Demand provides subscription services and investors in the media industry with a new level of insight in to the motivations and habits of subscription service users. At Kantar we are focused on helping providers grow their subscriber base by driving new customer acquisition and improving customer retention by fine tuning the customer experience. Understanding key drivers behind digital behavioural patterns is vital for clients to understand what digitally focussed consumers want, think and do. He continues, “From our US research we can see that with the explosion in the number of digital subscription options available, the customer journey for different digital services is increasingly differentiated.”
Read Cundiff, North American CEO at Kantar, added “Kantar is the industry standard for understanding and tracking global Smartphone behavior and is the currency for the TV viewing habits in more than 60 countries around the world, as well as being the leading global source of ad spend. This new service expands our expertise in to the subscription market, and will help, major players, market entrants and investors understand the ‘why’ behind the ‘buy’ decision subscribers are making. The launch of this service reflects the rapid expansion in the digital subscription market as well as the changing needs of our existing clients who are expanding from hardware further into service provision.”