New services set to drive global SVOD revs to $36BN in 2019
By continuing to use this site you consent to the use of cookies on your device as described in our privacy policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. [Close]
Improving broadband quality, increasing smart TV penetration, the availability of services and perceived value are driving subscription video-on-demand to become an integral part of the video viewing lifestyle, says research from Futuresource Consulting.
AppleTVplus 26May2019
The report calculates that SVOD already reaches more than 60% of households in North America, 26% in Western Europe, 21% in Asia-Pacific and 19% in Latin America. Netflix and Amazon Prime Video accounted for a third of all subscriptions globally in 2018.

However, when it came to SVOD spend, the two companies were found to have commanded almost two-thirds of the market, with Netflix leading the way in terms of headlines, subscribers and revenue, adding an extra 31 million subscribers to its ranks in 2018 and has just posted its most successful quarter to date. Overall SVOD consumer spend exceeded $29 billion in, up 38% on the previous year.

SVOD has come of age, noted David Sidebottom, principal analyst at Futuresource Consulting. “In 2018 we saw many companies realign their strategies amid a raft of major media acquisitions, setting the scene for the next wave of SVOD evolution,’ he remarked. “In particular, Disney’s acquisition of Fox, along with the completion of AT&T’s acquisition of Time Warner are making themselves felt. With both intending to launch direct-to-consumer (D2C) services, this will shape the SVOD landscape in the USA and, in the longer term, worldwide. Consumers are seeking a combination of functionality, high-quality original content and low price.”

Going forward, the Futuresource report cautioned that although the uptake of multiple services will continue to drive overall subscription numbers, the market will be limited to a small number of clearly differentiated and complementary services. This makes a carefully defined market and content strategy even more crucial.

“Consumers face an increasingly confusing video landscape,” Sidebottom added. “Partnerships between trusted pay-TV or content aggregation platforms like Amazon Channels, Roku, Apple, and even pay-TV providers, will be a vital aid to navigation. Due to large populations of existing users, Apple and Amazon Channels are both well-placed to succeed in the soon-to-be-fragmented world of aggregation, but both currently lack ubiquity of content internationally. However, this new breed of ‘super aggregators’ will become an important component in the battle for the living room, though, in many instances, they have yet to fully realise the three consumer requirements of quality, original content and price.”