SVOD Subscriptions to Reach 208M by 2023, No End in Sight
When will Americans have their fill of SVOD services? No time soon, says Digital TV Research.
According to a forecast, U.S. consumers held 132 million subscription video-on-demand (SVOD) accounts in 2017, representing 111.5 percent of all TV-owning households. By 2023 that number will climb to 208 million accounts representing 173 percent of all TV households.
"I think that the saturation point is beyond the last forecast year of 2023. In fact we forecast 8.5 million SVOD subscription additions in 2023 alone—so still plenty of growth left," says Simon Murray, principal analyst at Digital TV Research.
By the end of 2017, 55 percent of all U.S. TV households had at least one SVOD account, while the average subscriber had 2.03 accounts. By 2023, 73.5 percent of all U.S. households will subscribe to at least one SVOD service, and the average subscriber will have 2.35 accounts.
While there's still plenty of growth to come, Murray sees it slowing. The area added 26.5 million subscriptions in 2017.
Several unique factors make U.S. consumers especially willing to try SVODs: Pay TV services are expensive, Murray notes, so many consumers are happy to cut the cord. Amazon Prime Video is popular in the U.S., but Amazon Prime only available in 16 other countries. The U.S. also enjoys high broadband penetration available at competitive rates. And while skinny bundles (vMVPDs) are popular in the U.S., they haven't taken off in other countries.
Three services are enough, say many households. With so many choices, consumers wonder which are essential and which they need to drop.
As the streaming video market gets more crowded, consumers get more confused. Look for aggregation services to grow in importance, with Apple and Amazon taking the lead.
Netflix will remain the market leader in the near future, but Rethink Technology Research sees the SVOD leader's market share diminishing.
Young adults lead the way in streaming video, but growth has slowed for that demo. Older adults are now joining in and subscribing to more services.
Subscribers are happy with the content and price of their streaming services, although two-thirds would consider a commercial-sponsored free tier, if available.
Streaming use is high: Over 9 in 10 SVOD subscribers user their accounts weekly, with a third watching between 1 and 5 hours of video.