Still think that sex sells? Think again: On average, only one percent of occupied hotel rooms order paid VOD on any given day, and 90 percent of the profits from those transactions are for adult entertainment. But hotels that replace VOD with Netflix, 40 percent of rooms stream something from the service on average.
That’s data from hotels around the world gathered by Enseo, which has been in the business of supplying technology for in-room entertainment for 17 years, and the company’s technology has powered many traditional hotel room entertainment solutions. Which is why Enseo CEO Vanessa Ogle has a tough message for hotel operators these days that they’re resistant to hearing: Get rid of all the porn, and replace it with Netflix instead.
“It’s a hard conversation,” Ogle said during an interview with Variety at CES in Las Vegas this week. That’s because premium video in hotel rooms has historically generated some serious revenue for hotels, and most of that money comes from adult fare.
But Ogle argues that it’s just not worth it — and has some numbers to back it up. Not only is Netflix a lot more popular than paid adult fare, consumers that find Netflix on their hotel room TV also tune in for much longer than they use other sources of content. The average news or sports viewing session in a hotel room lasts 14 minutes, said Ogle. The average Netflix session comes in at 90 minutes. Overall, Netflix ranks within the top three networks in any of the hotel rooms that it is available in, she said.
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Last summer, Enseo struck a deal with Netflix that allows the company to integrate Netflix’s app into the TVs of hotel rooms worldwide, and now has the app up and running in more than 100,000 hotel rooms around the globe, including big properties like the Cosmopolitan in Las Vegas. Enseo’s solution asks customers to sign in with their own accounts to access their recommendations, and also comes with a Netflix button on the in-room remote control.
Enseo isn’t the only company looking to bring Netflix and other streaming services to the hotel room. Some competitors use solutions based on Google’s Chromecast technology to do the same, but Ogle said that her company instead opted to build its own technology, and directly integrate streaming apps.
That’s in part because of all the politics that makes consumer electronics so complicated these days. For example, Google and Amazon don’t see eye-to-eye on many issues, which is why Amazon Video doesn’t support Chromecast. “I’m not gonna get in the middle between Amazon, Apple and Google,” said Ogle. She added that native integrations also allow Enseo to deploy the latest app versions.
Hotels that do use Enseo’s technology currently have access to a handful of applications, and Ogle believes it makes sense to only partner with a few of the most-used ones. “Nobody uses hundreds of apps,” she said. And instead of partnering with dozens of music streaming providers, Enseo instead added Bluetooth functionality to TV sets, allowing consumers to stream music directly from their phones.
So what about those adult movies, and the money they made hotel chains? Ogle argued that hotel operators should take a closer look at those numbers to see if they really add up. Many consumers would watch porn late at night, and then dispute the charge during checkout the next day, leading to countless chargebacks — which is one more reason to switch to Netflix. Said Ogle: “Hotels are losing money on VOD.”
Correction: 1:50pm: An earlier version of this article incorrectly stated that 90 percent of VOD transactions in hotels are adult entertainment. In reality, 90 precent of the profits from these transactions are generated with this type of content.
