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Europe still reluctant to pay for OTT video

The number of paid OTT video subscriptions in Europe is significantly lower than in the US, according to data released this week by Parks Associates. While 64% of US broadband households subscribe to OTT video, only 30% of UK and 17% of French broadband households do the same.

“In many parts of Europe, pay TV penetration is lower than the US and European consumers have been reluctant to pay for video in the past due to so many ‘free’ options such as the BBC iPlayer,” explained Brett Sappington, director of research at Parks Associates. “But, as more pay options enter the market, with content unavailable anywhere else, they are slowly changing the culture of video viewing in Europe.”

The research also showed that overall, OTT video usage in Western Europe continues to expand but still lags behind the US. In Europe, 55% of UK broadband households and 51% in France are watching TV programming and movies online, compared to 70% in the US. “We are seeing new OTT video services spring up but not as many as in North America,” continued Sappington.

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

“In the US and Canada, the quickly increasing volume of new options is driving high numbers of online viewing of TV and movies,” added Sappington. “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 US market, and Spotify recently added video to its freemium OTT music service. PlayStation Vue also recently became available nationwide across the U.S.

“We saw a big increase in the number of households subscribing to multiple OTT video services in the US market at the end of 2015,” concluded Sappington.

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