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We take for granted the ability to stream video-on-demand at the time of our choosing and on whatever device we happen to have handy. This privilege applies equally to shows that originated on linear TV and ones that were created specifically for digital platforms. And we’re willing to pay for this content via monthly or annual subscriptions, or by watching ads. This dynamic has created a large and growing economy that has massive implications for content owners, device makers, marketers and consumers. To paraphrase the popular trope about the MTV era, digital video will not kill the TV star, but it has forever transformed it, according to a new eMarketer report, “Digital Video Streaming: State of the Industry 2014.”
One key indicator of digital video audience metrics is subscriber numbers from Netflix and Hulu, both of which carry a mix of full-length movie and TV content, including a growing slate of original series. For Q1 2014, Netflix reported 34.38 million US streaming subscribers, a 23.2% increase from its prior-year figure of 27.91 million. Those increases were more than enough to offset modest declines in DVD subscribers, who now make up only a fraction of the company’s user base.
TV streaming leader Hulu announced in April 2014 that its Hulu Plus paid service had surpassed 6 million subscribers. This represented a 50% increase from the 4 million paid Hulu Plus subscribers the company had touted a year earlier. Hulu also announced that, as of the end of 2013, it was carrying 2,900 TV series, 86,000 episodes, and 68,000 hours of video from 488 content partners.
The reason Netflix and Hulu have realized such steep growth in their subscriber rolls at a time when growth in overall digital video viewers has moderated is simple: More people are gravitating toward full-length content as opposed to shorter clips.
This trend is evident in April 2014 data from the Interactive Advertising Bureau and research firm GfK, which showed substantial increases in time spent viewing online movies and TV shows from 2010 through 2013. By comparison, short-form content was relatively flat over the same period, and experienced a decline in 2013.
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