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Why Streaming Video Services Are In Robust Health Globally

Photo of Tim Mulligan
by Tim Mulligan

Despite the additional probability of a correction in the inflated TV content market, SVOD (Subscription Video On Demand) services globally are in robust health. In mature TV markets, nearly half of consumers now subscribe to SVOD services, with over 50% penetration in demographics for under 35s. Although still dominated by the US as the largest market and as the home of the two largest SVOD services, the non-US market is growing fast, with territories such as Singapore experiencing a significant increase in SVOD service availability in 2016. The result is an increasingly robust and diverse SVOD landscape where SVOD use is now on the verge of becoming a mainstream consumer activity in many markets.

MIDiA Research’s The State Of The SVOD Nation 2017 report which covers 362 global SVOD services, underlines just how rapidly the paid streaming video market is expanding. Growing discretionary consumer spending power, device ownership and significantly improving data plans in territories that have never previously had notable traditional pay-TV markets, have all fuelled the rise of SVOD across the world. In mature markets, SVOD, which initially was perceived as an additive service, is starting to morph into a substitute for expensive pay-TV packages.

SVOD Is No Longer The Poor Relation Of Pay-TV

SVOD is increasingly on the verge of becoming mainstream in mature markets and it is rapidly growing in emerging markets with huge implications for the TV and film industry. TV networks and film studios now have to contend with the reality that the old world of cable and satellite TV is rapidly transitioning into streaming pay TV with significant implications for revenue. Carriage deals will be squeezed as TV operators squeeze higher margins out of declining subscriber bases and also have to fund their fledgling OTT businesses. At the same time, the concept of territorial windowing has declining relevance in a world of global reach SVOD platforms, reducing the opportunities to derive additional revenue streams from windowing content distribution by territories around the world.

SVOD Is The New Iteration Of Pay-TV

The reality now, is that pay-TV is undergoing a technological shift with streaming becoming the industry standard for distributing content. From the consumer and the TV/film content producer perspective, this is a great time for premium video content. Content is more easily available and affordable then has ever previously been, and budgets are continuing to increase in the escalating battle to gain market share and market differentiation between the leading SVOD services.

From the perspective of the legacy pay-TV operators, the outlook is markedly different. Revenues are under pressure and the escalating cost of competing in streaming pay-TV, alongside the financial challenge of operating in a content bubble are creating existential pressure on the TV operators. In The State Of The SVOD Nation 2017, the competitive landscape and the relative strengths and weaknesses of the current offerings are explored, covering areas such as content type, regional market strength, pricing, genre, the role of sport in SVOD, etc.

With global mainstream online video penetration forecast by the true disruptive implications of SVOD are finally starting to emerge. Mass online video use will accelerate the shift to streaming pay-TV with profound implications for all aspects of the video landscape.

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