New data from comScore and M Science suggest Hulu subscribers are different from other SVOD service customers. But are these differences likely to give Hulu’s Live vMVPD service a leg up over the competition?
Hulu subs pay less for pay TV
M Science says it analyzes the frequency of various price declines across a consistent set of paying subscribers. The company says this approach allows it to provide a “directional indicator of card-cutting behavior.”
Using this technique, the company says that Hulu subscribers pay $10-$15 a month less for cable service than the average consumers. The same analysis shows Netflix subscribers pay about $1 less per month. This difference fuels M Science’s belief that “cord-replacement or displacement” is relatively high among Hulu’s SVOD subscribers.
It’s not clear that the data justifies the belief that cord-replacement is higher among Hulu subscribers, but other data suggests displacement may be higher.
Hulu displaces TV viewing more than other SVOD services
comScore says that households that rely exclusively on streaming for television entertainment understandably watch more online than the average streaming home. For example, the average Netflix viewers watches 26.9 hours per month on the service. The average streaming-only Netflix household watches 32% more, or 35.6 hours. Hulu customers watch even more. The average streaming home watches 28.9 hours per month. The average streaming-only home watches 27% more, or 36.8 hours per month.
The data shows that Hulu is watched more than Netflix by its customers. Given Hulu’s heavy focus on recent television episodes, this suggests Hulu SVOD customers are, indeed, using the SVOD service as more of replacement for regular television than Netflix customers.
Pay TV teaches consumers to watch more
One thing is clear from the comScore data: ex-pay TV customers watch more SVOD service content. comScore says that Netflix customers that have never had pay TV (cord-nevers) watch 35 hours a month online. Those people that had pay TV and got rid of it watch 9% more, or 38 hours per month. The same is true for Hulu customers. Cord-nevers watch 32 hours per month, cord-cutters watch 13% more, or 36 hours.
This trend is also true for YouTube viewers. However, it is not true for Amazon video. Cord-cutters watch marginally more (8%) than the average online video viewer, while cord-nevers watch 27% more.
What this says about the success of Hulu Live
The M Science data suggests Hulu SVOD customers are more value driven than other SVOD service customers. comScore data suggests those same customers are using Hulu more as a replacement for TV viewing than other services like Netflix.
So, Hulu SVOD customers may have a higher proclivity to cut-the-cord and switch to Hulu Live, if they can save money and live with the content selection.
Can they save money? To get Hulu Live costs an additional $30 over the SVOD service. Given the average pay TV customers is paying over $100 a month, that’s a huge $70 a month saving. Even if a subscriber wants Hulu’s DVR and unlimited in-home devices, she will still save $50.
And I suspect there are quite a few Hulu SVOD subscribers that will take a long hard look at Hulu Live when they find out they will save at least $50 a month.
Why it matters
Data is emerging that shows subscribers to different SVOD services have distinct behaviors.
New data suggests Hulu SVOD subscribers are more likely to embrace Hulu’s vMVPD service because of their behavior, rather than their existing relationship with the company.