• Viewers are increasingly ditching expensive pay-TV packages and migrating to subscription video-on-demand (SVOD) services. 
  • Those abandoning pay-TV packages fall into three main groups: cord-nevers, cord-cutters, and cord-shavers. Whereas video streaming services have found favor with younger viewers in particular, an increasing portion of older subscribers also are leaving behind their pay-TV packages. Still, younger viewers watch four times as much video content online than older viewers. 
  • Netflix is the largest SVOD service and will continue to dominate the industry with an impressive original content lineup and aggressive expansion plans. 
  • Amazon is trying to compete with Netflix by investing significant resources in original content.
  • Hulu is the third-largest SVOD service, but the only one to offer ad-supported membership tiers. Hulu has been the slowest to roll out original and exclusive content, but it has inked numerous deals in the past year to boost its content library. 
  • Apple is expected to release its own streaming service. The service reportedly will include live TV, an offering not available on any of the other major SVOD services. 
  • Alibaba is testing a streaming service that could slow Netflix or Amazon from breaking into the massive Chinese market.
  • Pay-TV companies are responding to the rise of SVOD services by offering subscribers "skinny bundles" and their own streaming services. 

The shift to digital viewing

How viewers are choosing to watch TV is rapidly changing. Every year, more viewers are ditching expensive pay-TV subscriptions and opting instead for SVOD services that allow them to stream the programming they want anywhere. Rising demand for SVOD services like Netflix, Hulu, and Amazon Video, as well as premium services from HBO and Showtime, has led many to question what the future of video entertainment looks like and whether traditional pay-TV has a place. 

In this report, BI Intelligence will examine how the growth of SVOD services is coming at the expense of the pay-TV industry. We will analyze the state of the pay-TV industry and map out which demographics are more likely to stop buying traditional TV packages. We will also discuss the user base, original content offerings, and subscription models of the major subscription streaming services available today, including Netflix, Hulu, and Amazon Video. Finally, we will look at how traditional pay-TV companies and premium channels like HBO and Showtime are addressing the shift to [...]