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The future of streaming TV proves history always repeats itself

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by Tim Mulligan

Our “MIDiA Research 2024-2031 global subscription video forecasts” lays out our vision for the subscription video on demand (SVOD) landscape over the next eight years. 

Our forecasts last year focussed on the remainder of growth coming from Asia Pacific. Following on from this, the most recent forecast finds that revenue growth will be fuelled by price rises and increased diversity of monetisation models as well as the expansion of lower cost, ad-supported tiers. 

What is particularly striking in the latest data is the decoupling of subscribers from subscriptions (i.e., paid users on accounts from the accounts themselves). Netflix's paid sharing rollout, initiated 12 months ago, started the ball rolling in normalising paid access to group accounts.  

Following this trend, forecasted revenues will outperform accounts growth over the next eight years. Overall Global SVOD revenue growth will average 13.3% per year over the next eight years, adding $116.6 billion net new revenue. However, total net revenue growth over the coming eight years is 2.0x greater than unique account growth over the same period.

This transition has been heralded by SVOD services becoming streaming TV destinations rather than an additive service to traditional pay-TV. Now, the big streaming services are competing for incremental revenue through retaining subscriptions, doing so by offering the full range of content mix found on linear TV. Reality, sports, and increasingly news are now part of the standard mix for disruptor D2C services such as Peacock. 

Hook them in first with Sports…

Netflix’s recent NFL deal to secure live streaming rights for Christmas day American Football is a prime example. The deal is part of a bigger push to make its ad-tier more attractive as a destination for advertising partners seeking to reach global audiences for the first time with a live sports stream. Sports has traditionally been one of the holdouts of traditional TV, and with Amazon now bidding for global NBA broadcast rights,  streaming TV is about to replicate it’s disruption of scripted drama and film in the world of sports. These kinds of mainstream sports events will pull in new subscribers, and secure newfound ad revenue as they unlock global addressable audiences (and previously paywalled) audiences.

…then keep them with IP banks

 

While it is these global sports opportunities that will draw new subscribers into the world of streaming TV, it will be proven intellectual property (IP) that will retain them.  Streaming services with proven IP banks – consolidated holdings of proven intellectual property – will be at a distinct advantage in the future. IP will become the primary driver for engaging and monetising mainstream consumers in a retention driven environment, where subscribers hold accounts for multiple services and are motivated by brand. With an increasing diversity of content and a multiplicity of competing fandoms to address, IP needs to be broad anddeep to function as an engagement driver.  Established streaming TV players, such as Warner Bros. Discovery and Paramount, are in a race against time to successfully deploy these multigenerational IP assets before more audacious (and better financed) companies, such as Sony, move to consolidate their own cross entertainment offerings.

Ultimately, the 2024-2031 period will be driven by increasing revenue through deepening and broadening IP and streaming TV experiences as retention drives revenue growth. For those who want to learn more, MIDiA Research 2024-2031 global subscription video forecasts looks closer at which players are likely to perform best in this environment, with some surprising take aways.

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