Streaming search engine Reelgood has published some interesting findings from its userbase, analyzing the combinations of services that its users entered to find shows they would like to watch. Recommendation engines, take note; there are apparently 2 million US users that find Reelgood to be a better option than your user interfaces.
Of course, that a service like Reelgood exists in the first place is a testament to how far the market has moved since the early days of SVoD – when it was either on Netflix, already recorded on your DVR, or you had to hope your pay TV provider’s VoD service might come through. We’ve now reached a point of such fragmentation that services like Reelgood can make a buck off the problem.
What you can see from the chart is that Netflix remains the most influential service. Everything else can be measured in the likelihood that Netflix is already in a household’s SVoD basket, as shown by its lowest percentage being 86% – for Amazon Prime Video.
So, if you look at any of the titles on the X axis, then look up the column to the Netflix header on the Y axis, you can see that if you are a Netflix competitor, your customers have over an 86% chance of already having Netflix. Similarly, if you are Netflix, you get an idea of just how entrenched your position is at the moment – with the highest chance being Prime Video, on 65%.
This was a problem we outlined in our recent Rethink TV SVoD forecast, which described how we are collectively approaching the point where the typical broadband home is going to easily have five video services in play – the pay TV bundle they choose to subscribe to or tolerate as it is tied to their broadband package, a FTA terrestrial alternative that might already be installed or only the purchase of an antenna away, and then a smattering of VoD packages.
The VoD packages tied to the pay TV option could be considered separate, but in the US, we are already seeing the arrival of separate SVoD services that have common parents. Comcast’s Peacock Premium and AT&T-DirecTV’s HBO Max are the best current examples. They were launched to help staunch the bleeding to the SVoD rivals that are not owned by pay TV outlets, chiefly Netflix and Amazon, but now Disney and Apple too.
Now, looking back to the table, you can confidently say that if a consumer has a subscription to Prime, Hulu, Disney+, HBO Max, Peacock, or Apple TV, then they are very likely a Netflix subscriber too.
There are a few different ways of reading this. What this suggests is that those who have Netflix are in no great hurry to expand much past that SVoD service, and our thesis in Rethink TV is that the high penetration of Prime Video is largely due to Amazon’s Prime subscriptions, and that the level of active habitual watching is lower on Prime Video than Netflix.
However, the 50% ratings for Hulu and Disney+ are a lot more promising, but it’s worth remembering that they’re essentially bundled now, thanks to the pricing model. In time, they absolutely will be bundled together properly, and it wouldn’t surprise us if Disney is already preparing to convert Hulu into its vMVPD offering, flanked by Disney+’s VoD catalog.
But you could take the view that every home that has an SVoD service in addition to Netflix is proof that Netflix’s grip is waning. The problem with this line is that we would then expect to see a lower ratio of Netflix subs in those houses that had taken its rivals, and that doesn’t seem to play out in the Reelgood findings.
There are a few other anomalies, of sorts, in the data. HBO Max has over 80% overlap with Netflix, Prime Video, Hulu, and Disney+, but only 19% overlap with Peacock. There’s not a technological or architectural reason for this, as far as we can discern, and that Peacock Premium score is lower than Apple TV’s 55% (surprisingly high, but due to the HBO app’s popularity, we believe) and even the 24% who use Free Services.
You do have to be a bit careful reading this table. When you check Apple TV subs, the anomaly is the 9% rating for Peacock Premium – a result that you would expect if you were reading from the top first, as that Apple TV result would suggest that 67% of Apple TV subs are also Peacock Premium subs. This is something that we would recommend Reelgood tries to address in future versions, as we’re sure there are going to be a fair few confused strategy leads.
In terms of broad takeaways, Netflix is still king, Prime Video shows no signs of going anywhere, and Hulu and Disney+ have made inroads too. However, it appears that Peacock Premium doesn’t stand much chance of poaching those subscriptions away. In that regard, HBO Max has performed much better than Peacock Premium – with 13% of Netflix homes having a subscription, 17% of Prime Video homes too, 20% for Hulu and Disney, 31% for Apple TV, and a truly weird 76% of Peacock Premium homes also having the HBO service.
This is a survey of some 2 million responses on the Reelgood website, which is an aggregator of sorts, that lets you add your subscriptions and can then act as a guide – letting users search for shows, finding them on the specific services they subscribe to, or guiding them to places they can purchase them. It’s essentially a search engine for SVoD.
Now, some of the aforementioned anomalies could be due to low counts for Peacock Premium and HBO Max, which might warp things in terms of charting the overlaps. But if we take Netflix as a confident basis, we can play around with the numbers and try to gauge estimates for the current penetration rates of these SVoD services.
Our Rethink TV Forecast puts the number of North American Netflix subscribers at 75.7 million in 2020. There are between 8 and 9 million in Canada, meaning that the USA has around 66 million in 2020.
If we use this number as the basis, and if we can trust the Reelgood ratios, then in 2020, Prime Video has 42.9 million, Hulu hits 33.6 million, Disney+ has 33 million, HBO Max will reach 8.6 million, Peacock Premium reaches 2 million, Apple TV has 15.2 million, and Free Services scores 9.9 million. Based on our Rethink TV findings, these are all within 10%, although we think HBO Max finishes ahead of our Reelgood back-of-napkin calculations, and that Peacock Premium will finish lower.