The streaming media player market has flattened, up a point from 2018, with penetration in 39 percent of U.S. broadband households, reported Parks Associates Wednesday. Purchase intentions are higher for 2019 than in previous years, Parks said. Connected device makers may need to shift focus from hardware sales to service and advertising revenue as ownership reaches saturation, said the researcher. “Streaming media has reshaped how US consumers interact with entertainment content and services, so as the market matures, sales increasingly come at another vendor’s expense,” said analyst Kristen Hanich. Roku (39 percent) and Amazon (30 percent) are “clear market leaders” of the installed base of streaming media players, benefiting from broad product portfolios with lower price points, she said. Roku and Fire TV adoption grows at the expense of Chromecast and Apple TV, said fellow analyst Craig Leslie.

Spotify has “settled in” to the U.S. market, seeing “a decent but not spectacular user growth and retention pattern,” said Consumer Intelligence Research Partners analyst Josh Lowitz Tuesday. The streaming music service added one million subscribers in Q1, CIRP reported, with 38 percent of U.S. Spotify customers paying for Premium memberships. Lowitz cited competition from Amazon, Google, and Pandora, and especially Apple, now that it’s all in on paid streaming after consolidating iTunes into Apple Music. In the June quarter, 13 percent of Spotify ad-supported listeners trialed a Premium subscription, less than half the percentage in Q1, CIRP said. One-tenth of paid Premium subscribers ended their subscription, either reverting to ad-supported or ending their memberships, it said, vs. 14 percent in the March quarter. “The total user base stabilized, as growth from trials slowed, and retention of existing paid users improved,” said CIRP's Mike Levin. That retention “increased nicely, with a lower churn rate relative to recent trends,” suggesting that in the U.S. Spotify “may be settling in to a maturing, loyal user base.” Findings were based on surveys of 500 U.S. subjects who used Spotify April-June.

AT&T Executive Vice President-Federal Relations Tim McKone warned members of Congress Friday that some of its DirecTV and U-verse subscribers could experience a blackout of their local CBS stations beginning Saturday because of a dispute over retransmission fees. The contract between AT&T and CBS was to expire at 2 a.m. EDT Saturday, meaning CBS-owned stations might have blacked out. The 17 markets that might have been affected were Atlanta; Baltimore; Boston; Chicago; Dallas; Denver; Detroit; Los Angeles; Miami; Minneapolis; New York; Philadelphia; Pittsburgh; Sacramento; San Francisco; Seattle; and Tampa. “We have offered CBS the highest rate we currently pay any major broadcast network group,” McKone wrote. “We have offered to market CBS All Access to our millions of customers on their behalf. CBS has rejected all these offers. CBS has a history of blacking out their stations to demand severe price increases. They have done this repeatedly to millions of DISH, Charter and other pay-TV subscribers.” McKone said AT&T customers would be able to get access to local CBS stations' content via the Locast app or with a free local channel connector antenna from the provider: "Ultimately, we need to modernize the [1992] Cable Act.” CBS “would like to avoid being dropped, but unless an agreement is reached, our viewers should be prepared” for a blackout, the broadcaster said in a statement. AT&T’s “willingness to deprive its customers of valuable content has become routine over the last few weeks and months, and recent negotiations have regularly resulted in carriage disputes, blackouts and popular channels being removed from their service.” Lawmakers pressed AT&T and Nexstar to resolve a retrans dispute that resulted in blackouts of DirecTV subscribers' access to more than 120 Nexstar-owned stations (see 1907170014).

Netflix significantly underperformed in Q2 against its paid net subscriber addition targets, saying in a shareholder letter Wednesday the damage was felt across all global regions. It finished the quarter with only 2.7 million net subscriber adds, 46 percent fewer than the 5 million it forecast in April. It had projecte 300,000 net subscriber adds for the U.S., 4.7 million internationally, but had 130,000 net subscriber losses in the U.S., and only 2.83 million net sub adds overseas. The worst performance was in regions where Netflix imposed price increases, said the company. “We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions (while our over-forecast was in every region). Rather, we think Q2’s content slate drove less growth in paid net adds than we anticipated.” The competition for “winning consumers’ relaxation time is fierce for all companies and great for consumers,” said Netflix. Competition will grow more intense in the next 12 months when new services launch from Disney, WarnerMedia and others, it said. “The innovation of streaming services is also drawing consumers to shift more and more from linear television to streaming entertainment.” In the U.S., “we still only earn about 10% of consumers’ television time, and less of their mobile screen time, so we have much room for growth,” said the company. Ad-free “remains a deep part of our brand proposition,” it said. “When you read speculation that we are moving into selling advertising, be confident that this is false. We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.” Minutes before the shareholder-letter disclosures, Netflix shares closed 10 percent lower at $362.44. The stock was trending 12.5 percent lower after hours to $317.19 at 5:15 p.m. EDT.

Over-the-top and pay-TV providers will lose $9.1 billion this year to piracy and account sharing, growing to $12.5 billion in 2024, blogged Parks Associates Tuesday. Currently, 27 percent of U.S. broadband households engage in some form of piracy or account sharing, it said. “Piracy is a complex issue that cannot be addressed with a single solution or by targeting a single use case,” said analyst Brett Sappington, noting that most video pirates subscribe to at least one OTT service. “They are not simply thieves looking to steal content but are video enthusiasts who engage with many different services,” Sappington said, suggesting OTT services could better reach those consumers through ad-based content, “which also aligns with these users’ general belief that ‘movies/music should be given away for free.’” Consumers who report viewing an OTT video service for free but without ads are 22 percent more likely than average broadband households to subscribe to OTT services, three times as likely to use ad-supported services, and twice as likely to use transactional online video services, said Parks. Growth in connected device ownership has shifted the focus of pirates toward the online video ecosystem; 20 percent of households are using a piracy app, website or jailbroken device, it said. “Growing subscriber numbers and an increased number of services signal a very healthy OTT market, but more services and aggressively promoted content could incite more piracy over time,” Sappington said, saying eventually consumers will hit an upper limit to spending. “When that happens, they will resort to pirate tactics to get the content that they want, particularly for sports and other content where trials are not available.” The demographic groups most often subscribing to OTT services -- men under 35 and households with low annual incomes -- pirate content at a disproportionate rate, he said.

Alibaba-owned Xiami Music is the first China-based streaming music service to adopt MQA technology, said Master Quality Authenticated Tuesday. MQA will be offered in the SVIP tier of Xiami Music, available as an app for iOS and Android platforms. Xiami has a library of more than 20 million songs, it said.

The one-time feud between Amazon and Google (see 1712280031) seems like distant history as the two tech giants have loosened restrictions preventing co-mingling of their hardware, software and platforms. Amazon.com is selling Google Chromecast devices -- which compete directly with its Fire TV sticks -- and as of Tuesday, Amazon Prime Video content can be viewed on Google’s Chromecast and Android TV devices, and the YouTube app is available on Fire TV, Google blogged. Amazon’s Prime members will have unlimited access to Amazon Originals and films on Google devices, while Google’s YouTube app will be available on “select” Amazon Fire TV devices: second-gen and 4K Fire TV Sticks, Fire TV Cube, Fire TV basic and Toshiba, Insignia, Element and Westinghouse Fire TV Edition smart TVs. Chromecast and Chromecast built-in users, with access to over 2,000 apps for content and games, can now cast content directly from their phone’s Prime Video app to a TV, said Google. Chromecast Ultra users will get access to 4,000 titles included with Prime at no additional cost, it said. Users will need the latest Prime Video app and Android 5.0 or higher or iOS 10.1 or higher on their phone or tablet to receive the update. In addition to the select Android TV devices that currently have Prime Video, “many more” Android TVs, set-top boxes and streaming devices will soon have the streaming service, it said.

AT&T's streaming service HBO Max, will roll out in spring 2020 with 10,000 hours of premium TV and movie content, including original content, it said Tuesday. Netflix tweeted it will lose the sitcom Friends to HBO Max.

Amid speculation Netflix is considering an advertising-supported subscription plan, Hub Entertainment Research released survey results Wednesday saying many subscribers would be open to the idea but only with a “significant discount." If Netflix included ads and kept current pricing, 41 percent said they would definitely or probably keep the service vs. 23 percent who said they would definitely or probably drop their subscription. If Netflix added an ad-supported tier as an option, a $3 lower price could persuade subscribers to sign up for the ad-free alternative, Hub said, while a $1 price drop for ad-supported “wouldn’t move the needle much.” If the current ad-free plan rose by $3, 58 percent of subscribers would switch to an ad-based tier at the current fee; 20 percent would quit, it said. The success of any Netflix ad-supported plan -- whether a replacement plan or supplemental one -- depends on whether consumers feel they’re getting a sufficient price break and value, said analyst Peter Fondulas: “Any attempt by Netflix to use an ad-supported plan as a reason to hike its ad-free price again could seriously backfire.” The July online survey was conducted with 1,765 U.S. consumers ages 16-74 who watch a minimum of one hour of TV weekly. Netflix didn't comment.

Viacom's advertising-supported Pluto TV streaming service rolled out Pluto TV Latino -- 11 linear Spanish and Portuguese-language channels with content such as dubbed Hollywood films and telenovelas, it said Monday.