Report: Digital Content Spending to Reach $432 Billion by 2026

Consumer consumption of digital entertainment is not slowing. A new study from Juniper Research found that the total market value of digital content will reach $432 billion by 2026, rising from $211 billion in 2021. This represents growth of 105% over the next five years — driven by gaming, premium VOD, pay-per-download, in‑app content spend, subscription streaming revenue and ad-supported VOD, among other distribution channels.

The new study identified digital games as the sector to generate the highest revenue by 2026, accounting for 45% of the global market value. It predicted that, as subscription services increase in popularity, digital games providers must differentiate their services through unique content.

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The report forecast that there will be more than 3.3 billion games users by 2026, rising from 2.7 billion in 2021, and urged games publishers to capitalize on this growth by offering subscriptions that leverage extensive content partnerships to provide regularly updated content libraries that justify ongoing subscription costs.

“Over half of digital content spend will come from smartphones,” Saidat Giwa-Osagie, co-author of the report, said in a statement. “However, as subscriptions become increasingly competitive, niche areas, such as augmented and virtual reality, will need to be considered when onboarding content partners.”

The report identified two key device channels anticipated to provide new revenue opportunities over the next five years: immersive reality headsets and smart speakers. Digital content revenue attributable to these device categories will grow from $2.4 billion in 2021 to $8.1 billion by 2026, representing growth of 275%.

North America and Europe will account for more than 50% of revenue from immersive reality headsets and smart speakers by 2026, and the report anticipated that high device ownership will result in these regions providing the most opportunities for monetization over the next five years.

Report: Online TV, Video Subscriptions to Reach 2 Billion Globally by 2025

New data from Juniper Research finds that there will be nearly 2 billion active subscriptions to on-demand video services by 2025, a 65% increase over the end of 2020.

The primary engine for this growth will be from traditional TV broadcasters increasingly turning to streaming video platforms to extend their linear reach and compete with online video behemoths such as Netflix, Amazon Prime Video and Disney+.

The U.K.-based Juniper notes that traditional broadcasters are turning to hybrid services, a combination of subscription- and advertising-supported monetization, such as NBCUniversal’s Peacock and ViacomCBS’s pending Paramount+ (currently CBS All Access), which offer tiered services that generate subscription revenue but show advertising in lower-priced viewer options. Juniper anticipates that these services will account for $1.4 billion in advertising spend by 2025.

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The report contends that as subscription services become increasingly prominent, particularly in the United States, different models will be needed to combat subscription fatigue among consumers. The report estimates that in 2020 there was an average of four SVOD subscriptions per domestic household, but with growth slowing significantly from 2021.

“Thanks to this high level of market saturation, streaming providers need to keep their offerings competitive to retain subscribers,” Nick Hunt, co-author of the report, said in a statement. “Hybrid monetization is one way that VOD providers can keep their offerings low-cost, and therefore less likely to be dropped.”

Juniper projects that more than 70% of streamed video sessions in the next five years will occur on smartphones, thanks to the emergence of social videos on platforms such as TikTok. However, these do not yield a high number of ad spots per video watched, meaning that smartphone advertising spend will only grow at an average rate of 2% each year over the forecast period.

Report: Increased OTT Video Choice Equals Higher Churn

The rise of over-the-top video has been driven by low cost and elimination of long-term contracts. With barriers to sampling gone, the churn rate (the percentage of subscribers who cut ties with the service during a given time period)among SVOD services is increasing.

A new consumer survey from Juniper Research found that increased churn rates are being faced by video streaming services such as Amazon Prime (-2.9%) and HBO Now (-19.2%) in key markets such as the United Kingdom and the United States.

Except for Netflix.

The subscription streaming video pioneer/behemoth outperformed its rivals; showing positive adoption rates in both the U.S. and across the pond (6.3% and 7.7%), undermining the notion services are discontinued after a trial month.

Juniper found that consumers are burdened with numerous SVOD subscriptions. For example, the survey highlighted that Chinese and U.S. survey respondents acquire an average of three subscriptions each, in comparison to 2.5 in the U.K.

“The use of multiple subscriptions suggests that no one provider offers enough to currently satisfy consumers,” Lauren Foye, research author at Juniper, said in a statement.

Foye said that as subs reduce or switch SVOD subscriptions, curation of content is becoming important, with the need to engage consumers as critical.

She said the collaboration between OTTs and traditional pay-TV platforms is key to a symbiotic relationship between new and traditional distribution models. For example, Sky hosting Netflix content via its Q platform; a slick and refined user experience.

The survey identified the importance of broadcast. More than 40% of U.K. survey respondents said that they streamed live sports, yet only 6% of these individuals watch sports through online channels alone; consequently, streamers continue to utilize TV broadcast.