There are now 250 million households worldwide who pay for streaming video services such as Netflix and Amazon Video, reports Strategy Analytics, and that figure is expected to grow to 300 million by the end of this year and to more than 450 million by 2022.
Netflix is clearly the dominant force in streaming video: its latest financial statements indicate that it had almost 111 million paid memberships globally in the fourth quarter of 2017. That’s about one-third of the aggregate number of streaming video subscriptions worldwide (345 million) estimated by Strategy Analytics.
US Leads in Streaming Video Penetration
Streaming video service penetration varies quite dramatically across countries. In its analysis of 25 markets Strategy Analytics found the US on top with 59% penetration, with Canada (51%) the only other country where a majority of households paid for streaming video services as of December 2017.
On the other end of the spectrum, several countries have less than 10% penetration, including Spain (9%), Italy (8%), Russia (5%) and India (3%).
A recent report from Ampere Analysis also found the US in the lead: in that study, 72% of online respondents in the US claimed to have at least one subscription video-on-demand (SVOD) subscription.
But that study found higher rates of SVOD subscriptions across the board: while Italy and France lagged, for example (as they did in Strategy Analytics’ estimates), almost half of respondents in Italy claimed to have an SVOD subscription.
More Evidence That Original Content Counts
There’s mounting evidence that streaming video service subscribers are placing a lot of emphasis on original content. A recent report from Hub Entertainment Research, for example, found that 61% of respondents said they might or would definitely drop their Amazon Prime subscription if it stopped producing original content.
Research from YouGov suggests that viewers will subscribe to TV services such as Netflix in order to watch specific programs – and a study from Magid also reportedly finds originals to be the driving force in subscription decisions.
Now, a new study from The Diffusion Group (TDG) reveals that fully 62% of Netflix subscribers believe that Netflix’s original shows play an absolutely critical (21%) or very important (41%) role in their decision to keep using Netflix. Just 14% said that originals are of no importance.
Within that context, it’s little wonder that the big streaming video services are hiking their spending on original content: TDG estimates that the top 3 players – Netflix, Hulu, and Amazon Prime Video – will triple their investments in originals to $10 billion annually by 2022.
Even that estimate seems conservative: Netflix alone reportedly recently said that it will hike its spending on original content to $8 billion this year, from $2 billion in 2017…