Older Americans are driving growth for Netflix-like services in 2018, and it could be a bad omen for traditional TV

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A new Ampere Analysis report found that subscriptions to SVOD — streaming video on demand — services have grown this year after plateauing in previous quarters.
Toby Holleran, an Ampere senior analyst, attributed the growth to older consumers switching from traditional TV to streaming.
Holleran also cautioned companies against forcing bundles on subscribers.

After a plateau in the US, subscriptions to streaming services are growing again thanks to a boom in Netflix and Hulu subscribers this year, a report from Ampere Analysis found.

The report found that subscriptions to SVOD — streaming video on demand — services had steadily increased from the third quarter of 2015 until the first quarter of 2017, when numbers began to stagnate. But subscriptions have been rising consistently since the beginning of this year, according to Ampere.

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Toby Holleran, an Ampere senior analyst, told Business Insider that an older generation rooted in pay TV was catching on to the benefits of SVOD services.

"Traditional users were more ingrained in the pay-TV space, and there was slightly less awareness of SVOD during that period" of plateauing, he said, "whereas now, especially with older demographics, we're starting to see more and more growth in those."

"I feel the plateauing was taking place among younger demographics because they formed such a large proportion of the overall SVOD base, whereas now with older demographics slowly familiarizing themselves with SVOD that's actually starting to grow again," he added.

That could be bad news for pay-TV companies, which could see an acceleration in cord-cutting if older generations find a viable alternative in streaming.

Exclusive content is also key for streaming services, Holleran said, as Netflix has been heavily investing in its catalog of original content in an effort to have 1,000 original TV shows and movies by year's end. Hulu also has acclaimed shows like "The Handmaid's Tale," which won the Emmy for best drama last year.

As the SVOD landscape rapidly evolves, more players are entering the game. Disney is set to launch a competitor late next year and is already developing Marvel and "Star Wars" TV series for it. Meanwhile, AT&T recently announced it would roll out a service next year that would include HBO.

That could lead to a new form of SVOD bundle — but Holleran urged caution, saying that the best course of action for streamers is to give users as many options as possible for the best price.

"I think forcing bundles upon people might not be the best move," Holleran said. "It depends on the price point. Additional costs may turn away consumers who may only want to take one service."

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