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Ampere: U.S. Streaming Revenue to Top Pay-TV in 2024

Ampere: U.S. Streaming Revenue to Top Pay-TV in 2024

The addition of ad-supported tiers to subscription streaming platforms is projected to help total U.S. SVOD revenue top pay-TV subscription revenue for the first time in the upcoming third quarter, ending Sept. 30, according to analysis from Ampere Analysis.

Streaming will continue to grow as traditional pay-TV declines — with the value of pay-TV in 2028 expected to fall to half the value it saw at its peak in 2017.

While SVOD subs in the U.S. overtook pay-TV subs back in 2016, streaming’s lower average revenue per user (ARPU), which currently sits at around 10% of pay-TV, means that streaming revenue is only now catching up.

With a slowdown in the growth of SVOD subs in the United States and the United Kingdom, the new focus is on revenue growth — driven by advertising. As a result, the introduction of cheaper ad tiers has not only been successful in increasing sub growth in mature markets, but also as an additional revenue source. Revenue from ad tiers will pass $9 billion in the United States this year, according to Ampere, bolstered by Prime Video inserting ads this quarter.

Hybrid advertising tiers, along with increasing clamp-downs on password sharing among SVOD account holders, have been successful at reigniting growth in the streaming market, according to Ampere.

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Disney and Charter’s recent deal in the United States, which gave almost 15 million Charter subscribers access to the Disney+ ad-supported tier, shows how the two businesses can work together to maximize streaming’s reach to domestic subscribers, and highlights the importance of traditional distribution platforms as service aggregators, according to Ampere.

“Longer term contracts and the reduction in churn makes this an attractive proposition for streamers, while control over the billing relationship also means there’s something in it for the pay-TV provider,” senior analyst Rory Gooderick said in a statement.

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