Reports: SVoD Subscriptions To Rise Along With Viewer Defections
Subscription video on demand (SVoD) serivce subscriptions are expected to continue to rise according to a study released by Digital TV Research, but Hub Entertainment warns competition will grow more fierce as month to month subscriber churn ratchets up the pressure.
According to Digital TV Research (DTV) Global SVOD Forecasts the number SVOD of customers will reach 1.69 billion by 2027, and the six top U.S. SVOD platforms will account for 988 million paying subscribers in the next five years, up from 612 million in 2021.
Despite losing a predicted 4 million subscribers in North America, Netflix, the world’s leading streaming SVOD service, will add 31 million subscribers between 2021 and 2027, the DTR study indicates.
That’s despite the fact that the firm’s latest Netflix forecasts for 2027 was lowered by 29 million since a February update to 253 million.
Digital TV Research added that Netflix will need to boost its content to stay atop newer and cheaper SVOD contenders.
In that regard, the DTR report forecasted rival Disney+ to pass Netflix in 2025 by adding 144 million subscribers, which would leave Disney+ with 274 million total subscribers. Most of those additons are expected to come from the Disney+ Hotstar direct-to-consumer operation slated to go online in 13 Asian countries by 2027.
The Asian market is predicted to provide 114 million (42%) of the global Disney+ subscriber total, but only $1.58 billion (11%) of projected Disney+ revenues of $14.7 billion by 2027, DTR finds.
Netflix, on the other hand, will likely come through the next five years as the global revenue leader, with $34 billion by 2027, or roughly the equivalent of Disney+, HBO Max and Paramount+ combined.
This is despite predictions that the Netflix revenue total will be $4 billion more than 2021 totals, as subscriber growth decelerates and average revenue per unit (ARPU) is squeezed.
The DTR Global SVOD Forecasts report also noted that behind two leaders in terms of customer numbers by 2027 would be Amazon on 252 million; Paramount+, 91 million; HBO, 89 million; and Apple TV+, 30 million.
Meanwhile, another study released by Hub Entertainment Research similarly finds the shift to streaming entertainment is not slowing down.
Hub said that in 2018, the average viewer used three different TV sources, but with the addition of major SVOD services like Disney+, HBO Max and the onset of the globabl pandemic between 2019 through 2021 SVOD business climbed the average number of service subscriptions to more than seven.
“All these platforms must compete for a pool of disposable time the same size as in 2018,” Hub Entertainment said. “As licensing deals with Netflix expire, the big players are saving their best content for their own platforms.”
Hub believes this presents a bigger challenge to all contenders as subscribers churn in and out, following their must-see shows.
According to Hub’s 2022 Best Bundle study, a third (33%) intend to add a new subscription in the next 6 months (up from 21% last year).
In addition, almost the same number (30%) said they intend to drop one – up from 20% last year.
“Streaming continues to grow. But there are more companies than ever competing for their share,” stated Jon Giegengack, Hub Founder and Principal. “Hanging onto new viewers after the show they subscribed to watch is over will be providers’ most important challenge in the future.”
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By Greg Tarr
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