OTT Video: U.S Leads, Europe Slowly Gaining

According to Parks Associates, OTT video usage in western Europe is continuing to expand, with 55% of UK broadband households and 51% ...

OTT Churn Rate Holds Steady at 19%
OTT Churn Rate Holds Steady at 19%
According to Parks Associates, OTT video usage in western Europe is continuing to expand, with 55% of UK broadband households and 51% in France watching video programming and movies online, compared to 70% in the United States. However, the number of paid subscriptions in Europe is significantly lower, where 30% of broadband households in the UK and 17% in France subscribe to OTT video, compared to 64% of U.S. broadband households.

"OTT is definitely gaining traction across Europe. We are seeing new OTT video services spring up, but not as many as in North America," said Brett Sappington, Parks' director of research. "In many parts of Europe, pay TV penetration is lower than the U.S., and European consumers have been reluctant to pay for video in the past due to so many 'free' options such as the BBC iPlayer. But, as more pay options enter the market, with content unavailable anywhere else, they are slowly changing the culture of video viewing in Europe."

Fueled by interest in the iPlayer and OTT video services from Netflix, Sky and Amazon, the UK remains one of the top markets in Europe for OTT video. New services are emerging in France, including a new transactional video service from retailer FNAC, but Netflix has struggled in the French market, despite partnerships with many of France's leading pay TV providers.

"In the U.S. and Canada, the quickly increasing volume of new options is driving high numbers of online viewing of TV and movies," Sappington said. "Each service is bringing new experiences for consumers, and many are providing new content that is unavailable elsewhere."

AT&T, Sony, and HTC have been the most recent to announce new OTT video services in the U.S. market, and Spotify recently added video to its freemium OTT music service. PlayStation Vue also recently became available nationwide across the United States.

"Consumers are trying and subscribing to more services," Sappington said. "We saw a big increase in the number of households subscribing to multiple OTT video services in the U.S. market at the end of 2015."

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