- U.S. consumer spending in the top 10 subscription video-on-demand (SVOD) apps surged 77% to $781 million last year from 2016, according to a study by analytics firm Sensor Tower. The final quarter of the year was stronger with an 88% jump to $242 million for video apps on Apple’s App Store and Google.
- Netflix, the streaming video service that added 2 million U.S. subscribers to total 54.8 million in Q4 2017, led spending on SVOD apps with a 113% jump to more than $290 million from a year earlier, Sensor Tower estimated. But Netflix didn’t keep pace with the growth of YouTube (154%), Starz (147%) and CBS (128%).
- HBO Now’s gross revenue in the U.S. reached $67.3 million in Q3 2017 during the airing of “Game of Thrones” with a single-day record of $2.6 million, Sensor Tower found. Sales fell to about $53.2 million in the Q4 2017.
As the streaming video industry grows more crowded, SVOD companies are showing their greater dependence on hit series to bolster subscriber growth and revenue. As consumers spend more time consuming content on these apps, it presents a challenge for marketers, as most are ad free or have limited ad opportunities.
Netflix was greatly helped by its two biggest hits, “Stranger Things” and “The Crown,” while CBS’s mobile app was driven by “Star Trek: Discovery” that brought an onslaught of new subscribers to the network’s CBS All Access streaming service. HBO Now typically experiences a surge of subscribers who want to watch “Game of Thrones,” but then loses some of those viewers until the following season premiere, according to TechCrunch.
Netflix’s success is leading other tech giants like Amazon, Apple, Facebook, Snapchat and YouTube to develop original programming for their platforms. In addition, Walt Disney plans to start a video streaming service as the media company acquires competitors like Fox to confront the growing threat from the tech industry. In another sign of the swelling confluence between Hollywood and Silicon Valley, HP CEO Meg Whitman this week was appointed CEO of a new venture backed by DreamWorks co-founder Jeffrey Katzenberg that aims to create original short-form premium content for mobile devices, Variety reported.
The SVOD category of apps is showing strong growth that outpaces other categories, Sensor Tower said. While revenue for the top SVOD apps jumped 77%, overall U.S. consumer spending on the App Store and Google Play increased about 30% to $14.4 billion in 2017 from the prior year. Worldwide gross in-app revenue grew 35% to $60 billion, per Sensor Tower.