What Does an OTT User’s Budget Look Like?

Benedicte Guichard | Tue Sep 20 2016 | Industry insights

OTT users Credit: marketingland.com

As you may have gathered by now, OTT is huge. More and more people are wising up to its incredible benefits and level of choice each and every day - and there is more to choose from than ever. Let's dig into the perception of users in terms how much they value OTT video in general and how comfortable are they to pay extra for a premium service. 

We often talk about OTT usage, technology and the latest industry developments, but we seldom speak about an OTT user's budget.

Users don't mind paying for OTT services

First of all, according to a recent survey carried out by Digitalsmiths, 61% Of cable subscribers now pay over $100 a month for their service. That's eye-watering.

It seems that the average OTT does have a reasonable healthy budget to spend on visual entertainment, but the rigid nature and dated thinking of the cable companies, in addition to poor value for money and rising monthly costs have driven them to cut the cord.

Prices are important though

Let's take a look at the current market of OTT services and the price levels.

OTT services prices

As you can see in the above graph, Netflix pricing is the lowest among the most popular video streaming service players (note that the Apple service is still not launched).

In this we are missing Hulu. They recently announced that they would be charging $40 per month for a slimmed down version of their service, and just under a third of those surveyed agreed that it is an acceptable fee.

While the average OTT user does have a reasonable entertainment budget, most want their services to be as cheap as possible. A survey by MoffettNathanson shows that most OTT users believe that $30 per month or less is the perfect price tag for a slimmed down OTT service.

How comfortable are OTT users with cutting the cord?

Now, despite the recent cord-cutting revolution, a study from Cut Cable Today revealed that a whopping 67% of Netflix subscribers still pay for cable or satellite.

It seems that not everyone is keen to cut the cord completely just yet, and this may well be down to factors such as TV subscriptions being bundled in with other services like telephone and the internet, or the need to keep up with news or current television shows.

Whichever way you look at it, OTT is thriving, and it's just going to keep getting stronger. OTT subscribers are looking for flexibility and value for money, and they're willing to pay for it.

The consumer budget is there and as a content provider, all you have to do is tap into it.

Interested in setting up a OTT service? Learn how you can build a winning solution:

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