May 17, 2021
The direct-to-consumer universe is exploding. New data from Convergence Research found that of more than 80 over-the-top video services, led by Netflix, Hulu, Amazon Prime Video and HBO Max, estimated 2020 access revenue grew 35% to $29.6 billion. The total is forecast to grow 35% to $39.9 billion in 2021, and $59.4 billion in 2023 — double the amount in 2020.
“We forecast average OTT subscriptions will increase to five per broadband household in 2023 from three in 2020,” read the report.
The report estimates cable, satellite TV and telecom pay-TV revenue declined 6% last year to $94.7 billion. The study forecasts a decline of 6.5% to $88.5 billion this year, and a decline of 10% in 2023 to $73.4 billion. At current run-rate SVOD access revenue will exceed pay-TV access revenue in 2024.
“We estimate 2020 saw a decline of 6.49 million domestic TV subscribers, 2019 a decline of 6.36 million, and we forecast a decline of 7.35 million pay-TV subs in 2021, and 7.76 million in 2023,” read the report. “Hence, U.S. pay-TV subs declined 8% in 2020, up from 7% in 2019, and will decline 10% in 2021 and 13% in 2023.”
“Pressure on programmers and pay-TV access providers to keep up spending in order not to lose programming primacy shows no signs of abating,” read the report. “Major programmers face a complicated trajectory, not only in terms of competition but balancing their linear & OTT programming, advertising, theatrical distribution, as well as direct-to-consumer businesses.”
While in decline, the traditional pay-TV business with advertising remains a $220 billion business.