The SVOD World Is Close to Being a Zero-Sum Market, Says Report
Last week, NBCUniversal gave more details about its upcoming streaming service, which includes one version for pay TV customers and another for cord cutters. That second version will likely cost around $10 per month. If you missed all the cheering from delighted streamers, that's because there wasn't any.
Survey results released from Hub Entertainment Research this week show that people already feel overwhelmed by their streaming subscriptions. You've probably felt that way, yourself. The average viewer watches shows from 4.5 different sources, notes Hub, including pay TV, streaming subscriptions, and ad-supported platforms. Netflix, Amazon Prime, and Hulu are the big three services in the streaming space, and 42% of those Hub surveyed use at least 2 of them.
In 2018, 14% said they had too many streaming subscriptions, and in 2019 that jumped to 24%. What's more 36% of those polled said if they were going to add a new service now they would definitely or probably drop a service.
That means for one-third of households, streaming is already a zero-sum game. I've seen other research that suggests most people don't want more than three subscriptions, and I feel the same. There are only so many viewing hours in a day.
Here's what I don't understand: Publishers still see the OTT world as a gold mine, and they're rushing to cash in. High-profile launches from Disney and WarnerMedia will have many people asking if they should cut one of their services, pack on a fourth or fifth—or just do without.
We're rapidly approaching the OTT tipping point and here's my prediction: We're going to see several high-profile failures in the near future. Three services are enough for most households, and that won't change anytime soon. Many services won't have enough revenue to fund their massive original content operations and will have to fold up.
In a hyper-competitive field, can you imagine paying $10 a month for NBC? I certainly can't.
The total number of subscriptions will grow by 439M from 2018 to 2024—an 86% increase—reaching 947M. In 2019 alone, the number will increase by 119M.
With established content brands plus AT&T's reach and a new cross-platform marketplace, WarnerMedia hopes to win ad dollars for platform launch in early 2020
Netflix will remain the market leader in the near future, but Rethink Technology Research sees the SVOD leader's market share diminishing.
The average SVOD subscriber takes 2.03 accounts. That will grow to 2.35 accounts in 2023, Digital TV Research forecasts.