IHS: New Video Services to Add $3.6B in Revenue, Saturate Domestic OTT Market

An influx of pending over-the-top video services is projected to add $3.66 billion to the direct-to-consumer entertainment market by 2023, according to new data from IHS Markit.

The research firm said services from Disney, Apple, and WarnerMedia are expected to launch this year, with NBC Universal launching an ad-supported platform to pay-TV subscribers in 2020.

These services have the potential to add 53 million paying subs to the U.S. market by 2023, effectively growing the total number of subs by 25%.

“Subscriber growth of this magnitude assumes an aggressive strategy from all the major services,” Dan Cryan, executive director of research and analysissaid in a statement.

“This strategy could include making movies available earlier or bundling, either at no extra charge or as a low-cost add-on, with other products and services that already have large customer bases. Less aggressive policies would result in lower overall subscriber growth, but they would still expand the video subscription market.“

According to the “Disney, Apple, Netflix: Scenarios for the Future of Online Video” report, Netflix and Amazon Prime Video will continue to lead the market for the next few years. Apple could potentially catch up with Hulu by 2023, depending on what happens to that service after Disney’s acquisition of Fox has been finalized.

“A successful Disney service would also be among the top-tier services in the U.S. by 2023,” Cryan said.

Regardless of Netflix and Prime Video’s market dominance, IHS said the market for pure-play video services will become “exceptionally” competitive. And despite their burgeoning original content spending, studio-driven upstarts bring their own strong content libraries to the equation.

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