Digital TV Research: Streaming Video Revenue to Grow by $89 Billion Through 2027

Global revenues from OTT TV episode and movies are projected to reach $224 billion in 2027, up from $135 billion on 2021, according to analysis firm Digital TV Research. About $21 billion is expected to be added in 2022 alone.

SVOD revenues will climb by $48 billion between 2021 and 2027 to total $136 billion. AVOD revenues will increase by $37 billion between 2021 and 2027 to reach $70 billion.

From the 138 countries covered, the top five will command 65% of global OTT revenues by 2027. OTT revenues will exceed $1 billion in 25 countries by 2027, up from 17 countries in 2021.

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“The U.S. will command 45% of global revenue by 2027,” Simon Murray, principal analyst at Digital TV Research, said in a statement. “We forecast that U.S. streaming revenue will climb by $45 billion between 2021 and 2027 to reach $106 billion.”

Parks: 36% of Streaming Video Subs Stop/Start Multiple Services

A new Parks Associates report finds 36% of over-the-top video subscribers, roughly 32 million U.S. households, are “service hoppers,” defined as subs who switched between services and resubscribed to services multiple times in the previous 12 months. The report details the challenges in subscriber acquisition and retention and the latest developments in data and analytics used to improve business operations and better engage subscribers.

Dallas-based Parks finds that all methods where subs interact with OTT services, from subscription to platform usage, are rapidly diversifying. In the early market, households would subscribe directly via an OTT provider’s website, but the percentage of households subscribing directly via an OTT provider’s website declined from 41% to 29% between Q1 2020 and Q3 2021. Instead, households are taking multiple paths to video subscription, including through OTT aggregators, including Roku and Amazon Fire TV.

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“Data collection and analysis offer new ways to attract and retain viewers, optimize revenue, and create new value,” Elizabeth Parks, president and CMO, Parks Associates, said in a statement. “Data allows vendors to identify subscribers at risk of churn and can even tag the ‘server hoppers’ who will jump in and out of services no matter what, so that providers do not waste resources chasing them in vain. Advanced data tools help companies make more informed decisions about the content and structure of their services and special offerings.”

Given the enhanced value of subscriber data, some content providers are seeking to re-establish control over their viewers — and the data about them — by not offering subscriptions via aggregators. In 2021, a substantial group of streaming households subscribed to a service via Amazon Prime Video Channels, but that percentage could drop in the future, as HBO and HBO Max were removed from the platform in September. Likewise, Disney+ is not available through major aggregators, and NBC recently announced it is moving many of its shows exclusively to Peacock and away from Hulu.

U.S. Streamers Driving Western European OTT Video Revenue/Subscriber Growth

New and established U.S. subscription streaming video services continue to drive Western Europe over-the-top video revenue growth.

Western European OTT TV episode and movie revenue is projected to reach $45 billion in 2027; up from $26 billion in 2021, according to new data from Digital TV Research. The key countries driving revenue over the next five years include the U.K. with $4 billion, Germany and France with $3 billion each, and Italy with $2 billion.

The U.K. is the largest OTT revenue earner in Western Europe. Its $6 billion in revenue provided 24% of the region’s 2021 total. The U.K.’s $10 billion in 2027 revenue will represent 22% of the region’s total.

Three U.S.-based streaming platforms will not only drive European growth but could also control half the world’s SVOD subscriptions by 2027. Despite its maturity, Netflix is slated to add 60 million subscribers by and 2027.

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Disney+ is projected to overtake Netflix in subscription terms in 2028. Disney+ should add 146 million subscribers by 2027 to take its total to 276 million.

HBO Max is slated to add 65 million subscribers to total 90 million in 2027. Paramount+ [including Sky/Showtime] is projected to increase by 55 million subscribers to reach 88 million by 2027.

“SVOD far exceeds any other revenue source for Western Europe,” Simon Murray, principal analyst at Digital TV Research, said in a statement. “SVOD will increase by $13 billion between 2021 and 2027 to $30 billion. AVOD will add $6 billion to reach $12 billion.”

SVOD subscriptions are projected to reach 258 million by 2027, up from 164 million by end-2021. Four countries would provide two-thirds of the total. Germany would overtake the U.K. in 2026.

As SVOD continues to grow, Western Europe is slated to lose 7 million pay-TV subscribers by 2027 to reach 100 million. Pay-TV subscriber counts would fall for 14 of the 18 Western European countries through 2027. Germany would lose 2 million subs, with the U.K. down by 1.4 million and France nearly 1 million.

“Pay-TV revenue will decline by $5 billion — 18% — between 2021 and 2027 to $22 billion,” Simon said. “The pay-TV subscriber count will drop by 7%, so revenues will fall faster — revealing lower TV ARPUs and less emphasis on TV from the operators. IPTV will overtake satellite TV in 2026 to become the most lucrative platform.”

TiVo Looks to Bridge Gap Between Linear TV and Streaming

TiVo Feb. 28 announced the launch of TiVo Xtend, a platform of advertising software aimed at bridging the gap between linear TV and streaming via TV viewership data.

Ad-supported VOD and free ad-supported streaming television (or FAST) aims to deliver free content to viewers while subjecting them to targeted commercials.

As TV consumption shifts away from linear and toward OTT and VOD, advertisers are seeing their reach decline from traditional TV buys. TiVo’s new software is designed to allow advertisers to understand how audiences are engaging with their TV campaigns.

TiVo, which created the original DVR in 1999, continues to redefine home entertainment distribution with technology that focuses on personalization and making it easier to find and watch content. As a real-time data provider, TiVo claims to enable brands, agencies, programmers, publishers, platforms and measurement firms to integrate TiVo’s viewership and TV ad exposure data into their planning, measurement and attribution products and services.

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“With TiVo Xtend, advertisers can deliver incremental reach with their CTV campaigns and drive more impactful results,” Walt Horstman, SVP of monetization at TiVo, said in a statement. “Powered by our linear-TV viewership data, the [software] suite enables marketers to optimize outcomes for integrated campaign initiatives. The integration of our behavioral data will enhance the effectiveness of audience creation and targeted CTV placement.”

Key TiVo Xtend features include:

  • TiVo Xtend Data: Deterministic, first-party viewership data to identify who has or has not tuned into programming or seen a message from a brand or its competitor(s).
  • TiVo Xtend Audiences: Custom or pre-built programmatic audience segments, scaled and tested for precise digital targeting on CTV, PC, tablet and mobile.
  • TiVo Xtend CTV: Premium CTV inventory layered with Xtend or custom audiences to add incremental reach and frequency to linear across 40 million households.
  • TiVo Xtend Dynamic Ads: Dynamic, clickable ads placed within native TiVo Guides to promote content to relevant and engaged audiences.

Digital Distributor Plex Names Manish Gupta VP of Growth

Digital content distributor Plex Feb. 23 announced the hiring of Manish Gupta as its new VP of growth. Leveraging an extensive background using data-driven methods to accelerate marketing and business outcomes at Facebook/Meta, Twitter, Google, eBay and PayPal, Gupta will be tasked with supercharging Plex user growth and retention. The company has also appointed three new board directors to help guide and drive the next phase of company growth. New board members include Carl Sparks, Kelly Battles, and Rick Gibbs.

Manish Gupta

Launched in 2019, Plex offers almost 200 live-TV channels and 40,000+ on-demand movies and TV episodes on virtually every platform, including iOS and Android devices. With more than 25 million registered users globally, Plex has users in 193 countries. The company has secured more than 300 entertainment content partnerships, including Lionsgate, Warner Bros. Domestic Television Distribution, MGM, Sony Pictures Television, Sinclair Broadcast Group, AMC, A+E, Crackle and the BBC.

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“Manish and our new board members are strong additions to the Plex family as we are driving toward our mission of being a one-stop-shop for streaming media and scaling the company during a period of rapid growth,” CEO Keith Valory, CEO of Plex, said in a statement. “Manish’s background in customer insights and growth marketing is exactly what we need to ensure we are not only appealing to new users but bringing them back time and time again.”

Conviva: 2022 Beijing Winter Olympics Opening Ceremony Streaming Viewership Up 349%, TV Viewership Down

Despite a heightened geopolitical backdrop, including a U.S. diplomatic boycott of the 2022 Beijing Winter Olympics Feb. 3-20 to protest China’s human rights record, the Games are hit thus far on streaming video.

New data from Conviva found that streaming for the opening ceremony spiked 349% over 2018 opening ceremony — the massive growth in single-daytime spent streaming on the day of the 2022 Olympics opening ceremony as compared to 2018’s Pyeongchang opening ceremony in South Korea.

NBC Sports reported that it tracked 16 million viewers across broadcast and digital platforms, including Peacock. That’s down 43% from 23.8 million who tuned into the 2018 opening ceremony — when Peacock didn’t exist. The downward viewership trend mirrors a 36% drop for last summer’s delayed 2020 Tokyo Summer Olympics opening ceremony compared with the 2016 opening ceremony.

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With Peacock launching in July 2020, and owner Comcast affording the streaming platform live access to every minute of the Beijing Games, over-the-top viewership has skyrocketed.

Coniva found that tablets got the gold medal at the opening ceremony — accounting for 28% user share to tie connected-TV devices. Additionally, 55% of viewers preferred watching the opening ceremony on Apple iPads.

Meanwhile, Twitter leads thus far in Olympics-related social media buzz, while Instagram leads engagement. Twitter led all social platforms in volume of content posted accounting for 37% share, while Instagram delivered the most engaged audience with 66 of all engagements for Olympic committee accounts in the week leading up to the Winter Olympics.

Social media engagement is up 370% for national Olympics accounts — official Olympic committee accounts from over 120 different countries tallied a 370% increase in engagements compared to the average for the previous six weeks.

Notably, Team USA highlighted the first Indigenous woman to play for USA Hockey in the top-performing Facebook post.

U.S. Broadband Homes Without Pay-TV Projected to Hit 58 Million by 2025

The cord-cutting continues. New reported data from TDG Research contends the number of U.S. households with high-speed internet and without pay-TV service will reach 54 million by 2025. The tally was 38 million homes in 2020.

The projection underscores ongoing trends among major pay-TV operators such as Comcast, AT&T and Verizon, which have seen their broadband subscriptions skyrocket while linear-TV subs plummet. Broadband is the pipeline distributing over-the-top video into homes.

Beginning in 2010, just 8% of high-speed internet subs had jettisoned pay-TV. That percentage doubled in 2015, reaching 35% in 2020. A majority of domestic broadband homes with pay-TV is expected by 2026.

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“A decade ago, the [broadband only] segment was comprised almost exclusively of bleeding-edge adopters — those defined by a fascination with new products and services and a pocketbook to fund their experiments,” senior analyst Paul Hockenbury said in a statement. “Today, the BBO segment is largely defined by early-mainstream dispositions: buying only when the price has come down, the technology has peer-demonstrated benefits, and plenty of support is available.”

Interestingly, broadband homes without pay-TV still consume a lot of small-screen entertainment — reportedly just 10% less than the 31 hours consumed weekly by pay-TV households.

Among cord-cutters, about 60% of TV viewing is done via streaming video, which is 50% more than broadband homes with pay-TV. Not surprisingly, Netflix, Amazon Prime Video and Hulu are the top-streamed services among BBO households, with Hulu 10% more popular than high-speed internet homes with pay-TV.

About 66% of broadband-only homes stream AVOD content, with 76% opting for YouTube, compared with 36% for Pluto TV. More than 33% of  BBO homes also use a digital TV antenna, consuming 12 hours of content weekly.

Donald Trump Launching Social Media, SVOD Network

Former President Donald Trump is seeking to launch a social media platform and subscription VOD service following the merger of his Trump Media & Technology Group with Miami-based Digital World Acquisition.

The former president was banned from social media platforms Facebook, Twitter, Instagram, SnapChat and YouTube following the unrest from his supporters at the U.S. Capitol Jan. 6.

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In a statement, Trump said TMTG’s “Truth Social”platform and TMTG+ SVOD service would create a rival to the “liberal media consortium” and fight back against the big tech companies with “non-woke” entertainment programming, news and podcasts.

The company has hired TV producer Scott St. John to run TMTG+ operations. St. John is the executive producer of “Deal or No Deal’ and “America’s Got Talent,” among others.

“We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced,” Trump said. “This is unacceptable.”

Trump said his new platform can eventually compete with Amazon Web Services, Google Cloud, Netflix and Disney+. Truth Social is set to beta launch next month, with a full rollout set for the first quarter 2022.

In a consumer survey on the political website The Hill, 30% of respondents said they would frequent Trump’s online initiatives, while 54% said they would not, and 16% said they would consider it.

Parks: 39% of Streamers Access Services Based on Specific Content

New consumer data from Parks Associates reveals that 39% of streaming video viewers access platforms based on specific content available. In partnership with Conviva, Dallas-based Parks is presenting its latest research during the industry webinar “The Role of Content Discovery in OTT” on Oct. 14 at 10 a.m. CT (11 a.m. ET). The webinar explores content discovery strategies that companies are using as a key differentiation factor in attracting new subscribers and keeping users engaged.

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“Content is key to OTT success, and the path for consumers today to get to that content is the crucial search and discovery process,” senior analyst Paul Erickson said in a statement. “OTT players are successful when offering a premium, personalized user experience that allows subscribers to find and access relevant content based on their habits and preferences. A perceptive and intelligent content discovery strategy is a key differentiator in attracting and engaging subscribers over the long term.”

Parks found that three out of the top five factors that drive streaming subscriptions involve content and that the inability to find relevant content is a top reason for consumers leaving a service.

“With so many entertainment options at viewers’ fingertips, it is more important than ever before for streaming publishers to understand how consumers discover content in order to win their engagement,” said Nick Cicero, VP of strategy at Conviva.

Kagan: Cord-Cutting to Cost U.S. Pay-TV Biz $33.6 Billion in Annual Revenue by 2025

Cord-cutting among pay-TV subscribers is no longer a niche activity. The practice of giving up the traditional cable/satellite/telecom channel bundle for over-the-top video is now expected to strip nearly $33.6 billion in annual revenue from U.S. operators through 2025, according to new data from Kagan.

The research firm contends revenue from cable, satellite and telecoms will decline from $91.1 billion in 2021 to $64.7 billion by 2025 as subscribers jettison service for alternatives such as Netflix, Amazon Prime Video, Disney+, Hulu, Peacock, Paramount+ and HBO Max, among others.

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The changing viewing patterns, only slightly moderated by rising average revenue per unit, are forecast to depress sales, excluding advertising, by 45% from the 2016 peak of more than $116.9 billion.

“While all three major platforms are feeling the impact from the shift, the magnitude of the losses are expected to hit more acutely for satellite (i.e. Dish and Direct Stream) and telco (Verizon, AT&T) revenue subtotals amid waning commitments by major players and relative stability from the large cable providers such as Comcast and Charter,” Kagan wrote in a post.