February 20, 2018
The combined pay-TV and over-the-top video markets remain growing, with total revenue projected to top $140 billion in 2018, according to new data from Futuresource Consulting. This, despite a continuously evolving and challenging media and consumer landscape.
London-based Futuresource said the United States remains a global leader in digital adoption, while maintaining a balanced market overall – driven by expanding formats, platforms, services and business models.
The firm cited the rebranding of Movies Anywhere, increased availability of 4K UHD content and renewed discussion surrounding digital movie release dates, as “intriguing” efforts to sustain the transactional entertainment market.
In addition, Futuresource said the renewed push on direct-to consumer-services, media industry acquisition and government regulation (e.g. net neutrality), will ensure that the media landscape continues to evolve.
Indeed, the report suggests pay-TV, largely through increased ARPU (average-revenue-per-user) rather than subscriber growth, is contributing the most to overall revenue growth – in addition to SVOD continues to provide an increasingly significant contribution.
Household pay-TV penetration is projected to decline to 97.6 million this year from 98.7 million last year, according to Statista.com.
“The SVOD culture continues to strengthen, Futuresource estimates that there are now 125 million SVOD subscriptions in the USA,” David Sidebottom, principal analyst at Futuresource Consulting, said in a statement.
Although, SVOD consumer spend is just 10% of the total pay-TV market, further growth is expected in 2018, driven by continued growth in established services and the quick expansion of a plethora of less established services, with platforms such as Amazon Channels helping drive this momentum.
While challenged, the pay-TV market generated more than $100 billion in 2017. Cord-cutting remains largely hype, with subscriptions expected to fall 1% in 2018.
Futuresource contends multichannel video production distributors are stemming cord-cutting through proprietary and third-party launches of online TV platforms.