Ampere: SVOD Seeks International Growth to Offset Domestic Saturation

With subscription streaming services such as Netflix, Amazon Prime Video, HBO Max, Hulu and Disney+ having reached market saturation in the United States, the need to expand internationally is driving services to focus on niche foreign territories.

While SVOD pioneer Netflix is available globally, except in China, and Prime Video, and Disney+ have a strong presence in select European markets, with Disney also enjoying market leadership in India thanks to the acquisition of streaming service Hotstar in the 20th Century Fox merger.

Ampere Analysis finds that a key theme in 2022 will be the continued rollout of the international OTT services beyond the launch markets of the U.S. and Western Europe. Specifically, Disney+ is looking to launch in the greater Europe, Middle East and African regions in the summer, while HBO Max eyes Eastern Europe. Paramount+ and NBC Universal’s Peacock are working together to also establish a foothold in Eastern Europe.

“As of the end of 2021, Netflix will be present in over [33%] of Western European homes, and Amazon Prime Video in over [20%],” analyst Tony Maroulis said on a webcast. “Having two strong established players in the market puts new entrants in a very difficult position as they’re competing for the lower-down places.”

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Ampere contends that streaming services are able to grow regional subscriber bases through the investment of localized content. Although there is high engagement with Hollywood movies, there’s actually higher engagement for local TV shows and films, according to analyst Minal Modha.

“Netflix and Prime Video are beginning to tap into this in order to grow their subscriber bases in these countries,” Modha said.

Lottie Towler, research manager at London-based Ampere, contends that with the availability of international content growing, user demand for the content is increasing as well.

“Netflix Top 10s show that the worldwide success of a [French series] like “Lupin,” which did very well in Western Europe, also resonated with audiences further afield, in markets in Latin American and Asia Pacific,” Towler said.

Modha says that a deeper dive into Netflix and Prime Video subscribers finds that their local content interest is reflected at the macro level.

“What this means is that by tapping into local content production hubs, Netflix and Amazon will not only be able to attract new subscribers, they’ll also be able to satisfy the desires of their current subscriber base,” she said.

As streaming platforms diversify their content offerings targeting different markets, consumers are likely to see more partnerships with local production companies, according to Towler.

“We’re also likely to see more acquisitions, particularly as the pool of available studio titles to license gets smaller and smaller,” she said.

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