Video Spurs The Online Subscriptions Economy

Dimitar Serafimov| Wed Jun 06 2018 CET| Subscriptions

SVOD in subscription economy

Broadcasters and content producers have increasingly started to focus on growing their online digital subscription revenue and on formulating ever more varied and appealing digital subscription packages.

What makes digital subscriptions so tempting? 

Looking across all forms of online media, Deloitte found these principal drivers of the rise in online media subscriptions:

  • Demand-side: Increased willingness among consumers to pay for content online rather than consume ad-funded content. Furthermore, the attractiveness of the online model is, for some genres, becoming more compelling than pre-existing traditional alternatives. Music and video subscriptions offer access to vast amounts of content (tracks, playlists, series, movies) with some of which are customized to the subscriber, and all are available on demand.
  • Supply-side: Steady growth in the number of companies offering online media subscriptions, and fragmentation of content libraries. For example, rights to watch a specific sports team may be split across two or more providers, requiring more than one subscription, or drama fans may need to purchase two or more subscriptions to be able to access all the programs they want to watch. There has also been growth in subscription bundling.

These are heavily backed by the technological enablers that are facilitating online-only subscriptions. The steady rise in broadband speeds, the growing base of devices, ease of sign-up (and sign-out) and the growing size of mobile screens tops the list. 

Video-on-demand leads the pack

Numbers say that video and the SVOD model is the favorite among consumers.

SVOD leads digital subscriptions

One fact that supports the cause is that consumers are ready to embrace more video subscription packages (than music for example), because video content is more diverse, more niche, and more local. That is why SVOD always beat other types of digital content.

Netflix outpacing Spotify in subscribers

How do users handle all these subscriptions? 

A whole bunch of subscription management apps surged in the last few years offering to help users handle the growing subscription packages. These services promise to give people the information they need to only pay for the services that they actually use and be efficient with their budgets. Truebill, Trim are some of the most popular ones.

To wrap it up, consumers have become increasingly willing to pay for digital content – and at this moment, subscriptions are the optimal model for both consumers and providers.


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