Pay-TV firms to control 80% of TV revenues by 2022 | Pay-TV | News | Rapid TV News
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stratanalytics 21june2017Despite the success of Netflix, Amazon and others in building audiences for subscription video-on-demand (SVOD) services, these players still only accounted for 8% of the US market for subscription video and TV services in 2016, says research from Strategy Analytics.

The latest analysis from the company’s TV & Media Strategies team suggests that SVOD growth is likely to continue for at least the next decade or so, yet it will only have reached 18% by 2022. Strategy Analytics adds that even if this trend was to continue it would be the late 2020s before emerging players were generating revenues at the same level as legacy providers.

The survey also forecast that overall annual spending on subscription video and TV services in the US will peak at $130.3 billion in 2019 and then decline to $125.7 billion by 2022. Strategy Analytics believes that established pay-TV firms like Comcast and AT&T — who will offer legacy managed pay-TV services and in addition to internet-based services like DIRECTV NOW — will still account for more than four-fifths of total market revenues in 2022. The analyst expects the share of emerging competitors like Netflix and Amazon will remain below 20% until beyond 2022, with the annual revenue growth for emerging players falling to just 4.4% by 2022.

Concluding the analysis, Mercer warned that people should beware of 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,” he added. “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.”