Ampere: U.S. Household Annual Spending on Video Services Dropping

The average annual U.S. household spending on video services is projected to decline 8% by 2027, according to analysis from Ampere Analysis. The London-based research firm believes this year household spending on subscription VOD services will not be able to offset ongoing declines in pay-TV subscribers, resulting in a $90 annual drop in spending through 2027.

Annual video content spending in the U.S. peaked at $1,146 per household in 2022 with a post-pandemic bounce-back in theatrical expenditure and an 18% year-on-year increase in SVOD household spending to $374 per year. But this year domestic SVOD revenue growth is slowing, driven by market maturity and the economy. Separately, household pay-TV spending is projected to fall below $650 for the first time since 2006.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Meanwhile, in Western Europe, where the pay-TV market is stable, increasing demand for SVOD services will drive an 11% increase in household expenditure on video by 2027. In fact, Norway’s per household spend on video is set to overtake the U.S. by 2025, the first Western market to do so. Norwegian homeowners will each be spending over 50 dollars more on video than U.S. households by 2027, and almost $300 more than the average U.K. home, and substantially more than those in Germany, France, Spain and Italy.

“Spend on video has finally hit its limit for U.S. households,” Maria Dunleavey, senior analyst at Ampere, said in a statement.

Dunleavey suggests that unless streaming services can sustain significant price hikes, and adoption of hybrid subscription tiers grows, U.S. annual video spending declines could reach triple digits.

“For U.S. [media companies], capitalizing on this international growth is increasingly key given the pressures on domestic revenue,” she said.

Leave a Reply

Your email address will not be published. Required fields are marked *

5 + 18 =

This site uses Akismet to reduce spam. Learn how your comment data is processed.