DENVER – June 24, 2015 – Video streaming services are becoming hugely successful in the mainstream as more consumers cut cable and satellite in favor of a more flexible TV viewing experience. In the battle among streaming giants Netflix, Hulu and Amazon Prime Instant Video, Netflix remains king among consumers – but why?
A new brand study of streaming providers released today by leading consumer insights firm iModerate, and backed by social data from Luminoso, looked past the numbers to understand how consumers perceive each brand, including where they’re excelling and falling short, and how each is being used. The study revealed that consumers believe Netflix can wholly replace other entertainment options, Hulu is irritating users with its mandatory commercials and Amazon Prime Instant Video isn’t differentiated from Amazon Prime shipping.
“Nearly 40 percent of households now subscribe to a video streaming service, and while the industry has closely tracked their gains and losses, no one has really looked at consumer perceptions of these brands until now,” said iModerate partner Adam Rossow.
iModerate’s study of 2,500 consumers nationwide found that Netflix is the resounding favorite out of the three dominant streaming services. This popularity is not surprising, as it’s also reflected in market share, with Nielsen reporting that 36 percent of U.S. households subscribe to its service, far more than its nearest competitor.
Netflix – the one true entertainment disrupter?
What may come as a surprise is that Netflix was the sole service called out for its potential to supplant cable and satellite TV, and even unseat networks. In fact, 20 percent of participants said they’re confident Netflix can replace other video entertainment options altogether. Many respondents also predicted that Netflix will force the hand of cable providers by setting a new standard for quality entertainment that’s affordable and on-demand.
Why Netflix? The iModerate study reveals that variety is the No. 1 factor, with participants citing it more than any other benefit. Not only does Netflix offer an array of well-loved TV shows and movies, but also a number of newer original series such as “Orange is the New Black.”
Netflix is also known for being addictive and a binger’s delight. Numerous respondents said they like to convene with friends and watch entire seasons of TV shows, and some even referred to having a “Netflix day” or “Netflix binge” when they’re sick, lazy or want to reward themselves.
Hulu turns off viewers with commercial interruptions
Overall, consumers are only vaguely familiar with the Hulu brand, and study participants view it primarily as a novel way to stream TV shows, not necessarily movies. The ability to watch a favorite TV show after it airs was cited as a main benefit of Hulu’s service. That said, Hulu seems to be suffering from either a lack of awareness or benefits-oriented positioning, as 14 percent of participants couldn’t name a single benefit when asked.
Although many indicate they’re eager to try out Hulu, they tend to be most interested in watching a specific show, rather than seeking out content once they’ve arrived. This suggests that Hulu should institute more original programming and a friendlier interface to retain first-time viewers.
Study participants overwhelmingly called out one big downside of Hulu’s service – the compulsory commercials. A large number view the ads with irritation and disdain, and contend that, “once you start paying for Hulu, there really shouldn’t be commercials.”
A case of mistaken brand identity for Amazon streaming
Nielsen suggests that Amazon Prime Instant Video is gaining ground against its rivals with 13 percent of household penetration, yet iModerate’s research paints a different picture of the brand’s stickiness in the marketplace.
Many iModerate study participants believe Amazon Prime Instant Video lacks defining characteristics or value. Even more grave for the brand is that consumers aren’t differentiating between Amazon’s Prime streaming service and its two-day shipping service. When pressed about the benefits of Amazon Prime Instant Video, 23 percent of the responses referred to shipping instead.
Those who are familiar with Prime Instant Video described it as slow, annoying, and short on value – something they wouldn’t pay for if it weren’t free. Additionally, many who have the service said they weren’t sure how it works.
“While Netflix is the strongest contender to replace or supplement traditional TV, Hulu and Amazon could threaten its dominance by making a few tweaks, such as communicating a stronger benefits message, offering more original programming and building friendlier interfaces,” said Rossow. “There’s no doubt that cable and satellite companies are planning their counter-moves, so the battle isn’t decided yet.”
Key Study Highlights:
- 20 percent are confident Netflix can replace other entertainment platforms
- Users talk about “watching Netflix,” rather than watching shows on Netflix, indicating a strong platform brand identity
- Hulu is synonymous with TV, whereas Netflix is known equally for its TV and movie selection
- Hulu lacks brand awareness and is failing to communicate a strong benefits message
- Consumers tend to choose Hulu because they’re interested in certain shows, rather than the platform as a whole
- The Amazon Prime Instant Video brand is oddly entangled with Amazon’s Prime shipping service, and could become even more muddled with the company’s push around Fire TV
- Those with Amazon’s video streaming service don’t know how they have it or how to use it
The full study can be viewed and downloaded here.
The study was conducted in May and June 2015 through a combination of qualitative research and social media monitoring. Using ThoughtPath, a proprietary cognitive framework, iModerate crafted research questions about each streaming service and posed them to 2,500 consumers who ranged in age from 18 to over 65. The feedback was then analyzed with (iM)merge Analytics, a method powered by iModerate’s qualitative expertise and Luminoso’s text analytics capabilities that allows analysts to gain a deeper understanding of the perceptions of each brand by teasing apart the nuance in the open-ended feedback. Additionally, Twitter mentions of each brand were monitored using Luminoso’s Compass and accounted for in the findings.
iModerate is a consumer insights firm that helps clients become fluent in their audiences through a deeper understanding of their motivations, needs and language. Founded in 2004 and based in Denver, Colo., iModerate is known for pioneering and championing the online one-on-one. Guided by a proprietary cognitive framework, ThoughtPath, the firm’s conversations, analytics and longitudinal research gives clients a clear vision, actionable insights, and direct return on investment. Follow iModerate experts to hear insights on the blog, Twitter and LinkedIn.