Showtime and CBS All Access are now Nos. 7 and 8 on the list, respectively, and the WWE Network has fallen out of the top 10 as original scripted fare proves a strong draw for subscribers. While Parks does not include subscriber tallies along with its rankings, there is a significant spread between Netflix at No. 1 — 58.5 million subscribers as of Sept. 30 — and the rest of the pack. After about two to three years in the marketplace, HBO Now, Starz, Showtime and CBS All Access are each in the single-digit millions of subscribers.
“HBO, Starz, Showtime and CBS All Access demonstrate the powerful attractiveness of original content through series like Game of Thrones and Star Trek: Discovery,” said Brett Sappington, Senior Director of Research at Parks. “This pattern suggests new services such as WarnerMedia’s DC Universe and the forthcoming streaming service from Disney could achieve success quickly.”
Both HBO Now and Starz are seeing considerable subscriber growth via partnership sales on Amazon Channels. As premium networks, they are growing at a delicate moment for the pay-TV ecosystem. Both networks have gone through carriage disputes recently with top distributors — Altice in the now-settled case of Starz and Dish in the ongoing case of HBO. In both cases, the availability of their networks via a stand-alone OTT app has exacerbated tensions in the relationships, even though publicly network executives have maintained that OTT growth is a “win-win” for operators and programmers alike.
Parks counts skinny bundle offerings as discrete OTT options, which explains by the No. 9 and No. 10 slots are occupied by Sling TV and DirecTV Now.
OTT video subscription penetration has reached 64% of U.S. broadband households, according to Parks. More than two-thirds of these OTT households subscribe only to one of the top three services, Netflix, Prime Video, or Hulu, while 36% of broadband households subscribe to two or more OTT video services.
The online pay-TV audience is similar to the OTT audience—they are younger and quicker to adopt new technologies when compared to traditional pay-TV households. At the same time, they seem to be surprisingly loyal. Over the past three years, OTT churn rates have gradually fallen each year from 31% of OTT subscriptions cancelled each year in 2015 to 28% in 2018.