March 11, 2020
While SVOD services around the world continue to add subscribers, revenue continues to be largely driven by the United States — birthplace of the distribution channel created in 2007 by Netflix and Roku.
According to new data from Strategy Analytics, consumer spending in 2019 on SVOD services globally was $53.34 billion, with the U.S. generating 43% ($22.93 billion) of the revenue, followed by China (17%, $9 billion), Germany and the United Kingdom at 4% each ($2.13 billion). Overall, the top 10 countries represented 81% of consumer spending on SVOD services.
The report suggests that by 2025, SVOD consumer spend worldwide will grow to $102.86 billion, with the U.S. accounting for 44%, followed by China (15%), and Germany (5%).
Strategy Analytics suggest reasons for U.S. domination in SVOD revolve the fact that U.S. TV households are more likely to subscribe to SVOD than those in other countries. In 2019, 74% of domestic TV households subscribed to one or more SVOD service. In comparison, the global average was 32%.
On average, U.S. SVOD households are more likely to subscriber to multiple services than their counterparts in other regions. On average, domestic households subscribed to 2.45 SVOD services in 2019, by 2025 this will grow to 3.21. In comparison, SVOD households globally subscribed to 1.54 SVOD services in 2019, by 2025 this will grow to 1.82.
“Whether it is pay-TV, video rental and sell-thru, or subscription VOD, U.S. consumers have historically shown a willingness to spend on these products and services at a far greater rate than those in the vast majority of other countries,” Michael Goodman, director, TV & media strategies, said in a statement.
Goodman said local and regional SVOD services globally must be “realistic” about potential of SVOD revenue and not base their business models on U.S. levels of demand.
Indeed, SVOD services tend to be more expensive in the U.S. than in other countries, according to the report. Globally, the average spend per SVOD service in 2019 was $6.24, in the U.S. the average was 63% higher at $10.22 per SVOD service. Given that each SVOD household in the U.S. subscribes to multiple services, they spent an average of $22.52 per month compared to $9.26 globally.