On the other hand, according to a report by Strategy Analytics, emerging players such as Netflix and Amazon will only claim the remaining 20%.
This will be despite one of the key conclusions of the report being that legacy pay-TV providers will begin to see declining revenues in 2020, even taking into account new revenues generated by moving into the vMVPD space to counter the longer term decline in their “managed” pay-TV business.
In a blog about the findings of the report, entitled Subscription Video and TV – North America, Strategy Analytics’ David Mercer says:
“I can already hear the protests. Pay-TV and OTT are different. They shouldn’t be combined into the same model. Netflix is not TV, it’s killing TV. Netflix has only just got started – it will find new ways to increase revenues from its loyal subscribers. They are global players and will dominate the premium content market. Pay-TV subs are in decline and there’s no way back. Skinny bundles will rule.
“Which is all fine, and some of it may turn out to be true. But even though this is internet disruption, it will take time before the impact is fully felt. Viewers are still getting to grips with the complexity of choices they are faced with across the TV and video landscape. Inertia is strong and the legacy players are fighting back, by bundling their TV offers into multiplay packages or launching their own internet-based pay-TV services. Their video revenues will start to fall in 2020, but there is a long way to go, if indeed they keep falling.
“So beware those headlines suggesting Netflix is now bigger than the cable industry. The OTT players have had a remarkable impact on the video landscape and will continue to shake things up, but there is a long way to go before the winners can be announced. Video providers will improve their chances of succeeding in this complex new environment if they focus on identifying consumer needs and desired experiences, evaluating their existing products and service offers, and monitoring their market performance”.