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Analysis for 'One Touch Intelligence'

  • Report: 4% of Hulu Users Subscribe to Hulu Plus; Of Them 88% Also Subscribe to Netflix

    A new report being released today by One Touch Intelligence has found that 4% of surveyed Hulu.com users are subscribing to Hulu Plus and that of them, 88% of them are also Netflix subscribers. The survey included 970 individuals who subscribe to both a pay-TV service and a broadband Internet service, and have streamed or downloaded at least one TV show or movie in the past month.  Of the 970 individuals, 612 of them said they use the free Hulu.com service at least weekly, with 25 of them subscribing to Hulu Plus. Of the 25, 22 of them also subscribe to Netflix.

    On the one hand, the 4% penetration is noteworthy, since Hulu has yet to advertise the Hulu Plus service beyond its own site. That was reflected in the relatively narrow awareness of the service, with 68% of Hulu.com users who are not subscribing to Hulu Plus saying they are either "barely" familiar with Hulu Plus or not familiar with it at all.

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  • For Online Video Households, 31% of Video Time Now from Online Sources

    New research from One Touch Intelligence says that among households with adults who watch long-form TV shows and movies online, the percentage of their total video viewership spent online is now up to 31%. That equates to twice as much time spent watching DVDs and 5 times the amount spent using VOD. The research also shows that in these households, the most-used site for watching long-form content is Hulu, with 53% citing it.

    In addition, 48% of respondents said they watch online video on TV screens in their homes and that 11% of online viewing time in these homes is on TVs. The top devices used to connect online to the TV are Xbox 360 or connected PC (each 40%), PS3 (37%), Wii (36%) and TV with Internet capability (29%).

    As convergence devices continue to proliferate and long-form content is increasingly available, I expect that these numbers are only going to move higher. The full report, "Internet Video 2010: Content Usage and Devices" is available from One Touch.

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  • New Research on Netflix's "Watch Instantly" Shows Surging Usage

    Netflix's "Watch Instantly" streaming video usage is surging, according to new research by One Touch Intelligence, in association with The Praxi Group. The firms surveyed a qualified online panel of 1,000 Netflix subscribers in October. I've been eagerly following the Netflix's streaming initiative and this is the first research I've seen which reveals Netflix subscribers' Watch Instantly usage patterns. I'm pleased to offer the top-line results and analysis as a complimentary download.

    Click here to download the research

    The research confirms that Watch Instantly ("WI") enjoys broad support, with 62% of respondents (extrapolated to approximately 6.9 million of Netflix's 11.1 million subscribers) reporting that they have used WI since it was introduced and 54% (extrapolated to approximately 6 million subs) saying that they use it to watch at least 1 movie or TV show per month. Netflix itself has only disclosed (on its recent Q3 '09 earnings call) that 42% of its subscribers streamed at least 15 minutes of a TV show or movie during the 3rd quarter.

    Netflix subscribers also appear to be using WI intensively, watching an average 6 titles per month. The following chart shows the distribution of usage from zero to 8+ titles per month.


    WI usage is heavily tilted toward movie watching, with 92% saying they've used WI to stream a movie vs. 55% for a TV show. For each monthly usage level, more movies were watched than TV shows, likely reflecting the fact that movies are the majority of the 17,000 title WI catalog.

    Though Netflix has made huge strides in embedding the WI client software in CE devices (e.g. Xbox, Roku, Blu-ray DVD players, PS3, etc.), over 60% of WI viewing still happens on the computer. Coming in second, with 13.4% is computers connected to a TV. Only then do the CE devices start showing up in the research: video game console (11.1%), DVD player (5.7%) and Roku (3.6%). Clearly we're still in the very early days of the "convergence era" where broadband is widely connected to the TV. The research does highlight that the 3.6% Roku figure could be extrapolated to suggest that about 400,000 Roku devices are being used by Netflix subscribers, a relatively strong showing by the company.

    Meanwhile, if you thought Netflix WI would be leading to rampant "cord-cutting" of current video services (cable/satellite/telco), think again. Only 2% of the respondents said they've cancelled their incumbent video service, and it should be noted that the question asked if the disconnect was due to Netflix in general, not just WI in particular.

    Further encouraging to current video service providers is that 67% of respondents say they prefer to have both a Netflix and a cable/satellite subscription. Asked if they had to give up one, 20% said they'd give up Netflix first vs. 13% who said they'd give up cable/satellite first. None of this is reason for incumbent for relax - especially as WI and other streaming video services are poised to improve - but it does suggest that at least for now, Netflix isn't an either/or proposition for most people.

    This is just a quick summary of the findings; there's more available in the report. My view is that Netflix has made enormous progress with WI in a very short period of time. The decision to make it a value add to subscribers, rather than charging for it, has no doubt been key. In fact, TV Everywhere providers have wisely taken a cue from WI by also planning to offer TVE as a value add. Netflix has also made WI extremely easy to use, with only 15% of survey respondents saying it is "too complicated to use regularly." This too is a lesson for others to follow.

    With WI offering the prospect of Netflix lowering its massive postage bill, reducing its DVD inventory, and providing greater convenience to its subscribers, we can expect the company to continue investing heavily in WI. The big challenge for Netflix, as I've noted many times before, is beefing up their content selection. With WI the company is running into the thicket of prevailing Hollywood release windows which are not going to dramatically change any time soon. Still, I continue to consider Netflix the best-positioned emerging player in broadband-only premium video delivery. This story is still in its earliest days.

    (Thanks to One Touch's Stewart Schley for providing the research)

    What do you think? Post a comment now.

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