Covid-19 drives pay-TV, OTT subs to tipping point | Media Analysis | Business
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Research from Omdia has revealed the extent to which the Covid-19 has driven, and is still driving, a wide-ranging change in consumer behaviour which present a huge number of challenges for device, technology and media vendors.
OMdia 4K 18 Nov 2020
Presented at the 4K HDR Summit, Omdia’s Covid-19 Pandemic Update And Impact Summary noted that the likely impacts of the pandemic on the global economy will come in three phases: initial supply and demand shock; containment; recessionary pressures. The latter is predicted to see further demand reduction due to loss of jobs, income and spending power. How governments mitigate lost personal income and pressure on companies to make redundancies will be critical to how this plays out in the next months and how long the slowdown continues for. The study showed that three-quarters of consumers say the pandemic will drive a re-prioritisation of how they spend their money.

Yet there will likely be winners as well as losers among the sectors affected, with the overall impact across consumer digital services being driven mostly by e-commerce which will show massive growth at the end of 2020. This will be followed by a small if not marked improvement for home broadband and over-the-top (OTT) video. However, the study also shows that among the big losers will be the TV ad sector.

The other key trend revealed was that the OTT and pay-TV will now converge in terms of subscribers, with the firmer and an upward trajectory as the latter flat lines. The study predicts that by the end of 2020 there will be 1.064 billion global OTT subscribers, compared with 1.05 billion pay-TV subs. A year ago these were 849 million and 1.049 billion respectively and are set to be 1.146 billion and 1.055 billion. Showing the predicted diverging growth trajectories, Omdia predicts that by 2024, OTT will rack up 1.421 billion subs while pay-TV will have 1.064 billion.

Among the key device trends predicted for 2021 are that voice AI integration will be paramount for new TV devices generation. Omdia regards voice assistants are currently representing the most significant technology gap between TV sets and media streamers. Omdia expects TV manufacturers beginning to start to close this gap in 2021. The study data showed that less than half of the smart TVs in use can currently use a voice assistant, compared with over 80% of media streamers.

However, smart TV growth will vastly outpace media streamers over the next few years. Despite the widespread of portable devices with compatible displays, 4K is likely to remain a TV only technology. Omdia calculates that there will be 557 million 4K addressable TV sets by the end of 2020, 21% of all TV sets in use. By contrast there will likely be only 620,000 4K addressable smartphones and tablets, 0.01% of all such devices.

While giving TV manufacturers a unique selling point, this also does limit the addressable market for 4K content which could impact experiences and take-up. Covid-19 was also found to have had minimal effect on Ultra HD household development. Even though Omdia forecasts the number of households with a 4K TV to grow to over 800 million in 2024 it stresses that not all these households will be viewing UHD TV content. That said it recognised that the postponement of the Tokyo Olympics and Euro 20 championships have led public broadcasters in Europe to delay launches.

One area which Omdia forecasts particular struggle in is 8K.


Commeting on the trends revaled in the survey in what she sasy has been a bad year, María Rua Aguete, senior research director, media and entertainment, Omdia said: “People are still buying TVs and most of those TVs today are 4K. In terms of content it is a different story. Because of the delay in particular of the Tokyo Olympics, many broadcasters delayed the launch of channels. People were also looking at the Olympics in 8K. That didn’t happen. NHK is having to think about what to do with that channel.”