• Subscribe
  • Advertise
    • Media Info
    • Terms & Conditions for Advertisers
    • Mechanical Data

Broadband TV News

Independent. Since 2003

  • Home
  • News Line
    • Central & East Europe
    • People
  • TV
    • On Demand/VOD
    • IPTV
    • Cable
    • Satellite
    • Terrestrial
    • Distribution
  • Business
  • Tech
  • Columns
    • Chris Dziadul
    • Julian Clover
    • Robert Briel
  • Events
    • Events Diary
    • BTN Events
    • Events Coverage
    • Submit the details of your event
  • Features
  • Resources
    • White Papers

SVOD: up to 3bn more subscriptions

August 17, 2020 10.26 Europe/London By Chris Dziadul

There is room for some three billion additional streaming subscriptions across the world’s largest media markets despite some territories moving towards a ‘stacking ceiling’.

In trying to answer the question “how many services will the average household ultimately take?” Ampere Research looked at 20 of the largest TV subscription markets worldwide, including the US, UK, France, Germany, China, India, Japan and Brazil, to establish the theoretical ceiling for SVOD stacking behaviour. It estimates that this maximum ceiling for SVOD services per household is highest in the US, at roughly eight. In Europe, the figure is lower, at between two to five services per household. However, market realities will mean that few territories are likely to see stacking numbers reach these heights.

Ampere notes that despite cord-cutting, the average US household has continued to spend an almost identical amount on TV services every year — $900 — as they switch from individual high cost cable and satellite contracts to multiple lower-price SVOD services. This stability in expenditure, mirrored in many other markets worldwide, leads it to conclude that the fundamental determinant of stacking behaviour will be household entertainment budgets, and this allows calculation of a theoretical ceiling for SVOD uptake.

Daniel Gadher, research manager at Ampere Analysis, said: “Even as we begin to see growth in SVOD services in emerging markets, our analysis shows that opportunity for expansion is actually still a very solid proposition in established territories. As cord-cutting continues, the US stacking ceiling is theoretically as high as eight services per average household, while in developing markets like Brazil it is far lower – at just 1.5”.

Various factors will limit how close individual markets will get to this ceiling. One issue is sport. Pay-TV operators and networks currently control the majority of key sports rights in many major markets. Ampere’s past analysis has indicated that OTT players are unlikely to be able to wrest control of major domestic events in most developed markets. As a consequence, consumers who want to watch sport will have to continue subscribing to pay-TV services. This reduces the available budget for SVOD. In the US for example, factoring in sports spend, the capacity for SVOD services drops from eight per average household to between four and five.

Outside the US, some major markets are still seeing growth in household spend on TV. However, the underlying rate of change is relatively low. In these markets, Ampere expects growth in household outlay on entertainment to increase the ceiling for SVOD services by just 20% – 30% over the next five years.

In Ampere’s view, markets such as the UK and Germany have an average household capacity of roughly three services at current price points. However, this still translates into a sizeable number of subscriptions —88 million in the UK and 124 million in Germany. Similarly, in the USA, even four to five services per household would translate to a total of 510 -640 million possible subscriptions.

In total, this would mean up to 3 billion further SVOD contracts.

Gadher concluded: “To make the most of this capacity, OTT players first need to demonstrate that they are a viable replacement for existing paid-for TV services. This process is ongoing in the US and Canada, but elsewhere in the world, pay-TV has remained resilient. But as US studio content increasingly moves to the online world, the opportunity for new players to take a share of consumer entertainment spending, even in already busy markets, improves”.

  • Click to share on Facebook (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on WhatsApp (Opens in new window)

Related

Filed Under: Editor's Choice, Newsline, Platforms, SVOD, Top Story Edited: 18 August 2020 08:23

About Chris Dziadul

Chris is our Central & East Europe Editor. You can talk to Chris on Twitter @chrisdziadul or by email at cdziadul@broadbandtvnews.com

Latest News

  • Turkey blocks Deutsche Welle and VoA
  • Canal+ Austria added to Apple TV
  • Redge Technologies extends TVN Warner Bros. Discovery contract
  • Polish pay-TV: new statistics
  • Countdown to Canal+ Sport launch

Watch Video

EKT backing RDK – ANGA COM Roundup Video

Jill Mulder, VP Marketing, EKT discusses how viewing habits and the role of the operator is changing and why EKT now backing RDK, with Broadband TV News editor Julian Clover. … [Watch Now ...]

Xperi on using AI to identify your audience – ANGA COM Roundup Video

Patrick Byrden, Xperi's VP of Business Development & Strategy, tells Julian Clover how the company is using AI to detect who is watching the TV, and providing them with more relevant content. … [Watch Now ...]

Free Ebook

eBook: Overcoming the Top 5 Challenges in Server-side IP Ad insertion

IP video is a game-changer for advertising. However, unlike traditional television, IP video is more dynamic, with new devices, formats, content and services to consider. … [Download the eBook...]

Broadband TV News

  • Subscribe
  • About us
  • Contacts
  • Logos & Pictures
  • Privacy Policy
  • Terms and Conditions

Advertising

  • Media Info
  • Terms & Conditions
  • Mechanical Data
  • Video Services

News

  • Latest
  • Central & East Europe
  • TV
  • Tech
  • Streaming
  • Cable
  • Satellite
  • Terrestrial
  • IPTV
  • Business
  • People

Events

  • Events Diary
  • BTN Events
  • Submit the details of your event
  • Media Meet & Greet

Broadband TV News

PO Box 499
Cambridge
United Kingdom
CB1 0AH
news@broadbandtvnews.com

Connect with Us

 

Copyright © 2022 Broadband TV News LLP · Log in

 

Loading Comments...