Western Europe, US streaming TV hit all-time high | Media Analysis | Business | News | Rapid TV News
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]
Driven by the phenomenon of compounding, both combining and adding to services, the rapid growth of streaming TV, accelerated even further in 2020 by Covid-19 and widespread lockdowns, will force a strategic shift in business models according to new research from Ampere Analysis.
Ampere compounding 12 Jan 2021
The study suggested that compounding will characterise global TV throughout 2021 as the streaming TV boom forces a re-engineering of the TV value chain and the strategies for getting TV to the end viewer. It adds that it will impact every aspect of the TV value chain from content strategy to the structure of the supply chain, through to the way streaming services are packaged and sold to the end user.

Ampere calculates that the service stacking trend witnessed in 2020 has led to more than 400 million subscriptions to streaming services across the US and the leading five Western European markets. Ampere’s latest analysis reveals that the average US streaming household now stacks an average of four different subscription video services. In the five largest Western European territories, streaming homes have an average of two services. Overall across Western Europe and the USA, almost 10% of SVOD homes already take five or more services.

Yet in an evolution, compounding is set to break the stacking ceiling. Ampere notes that the breadth of choice in the streaming market today means compounding (or bundling) multiple streaming services into packages must be the next step in the evolution of the streaming market. This says Ampere goes beyond simple aggregation on a ‘platform’ like a Roku stick, Sky Q set top box or Amazon Fire device.

However, the analysis also noted that the streaming industry has yet to embrace the combining and discounting of packages of streaming services and this form of compounding seems bound to rise to the fore in the coming year. Indeed, it pointed out that several of Netflix’s recent strategic moves including Play Something feature and audio-only options point to positioning for a future in which streaming moves beyond appointment viewing that characterises the on-demand environment, towards a more linear-like experience where happenstance plays a greater role in content choice.

Looking as to how compounding will impact business models in 2021, Ampere says that principally the he supply side of the market is compounding with major studios re-structuring to centre their businesses around streaming and direct-to-consumer. The concept of international distribution to prioritise own-platforms for global roll-outs will accelerate throughout 2021, compounding the streaming business supply chain.

In addition, Ampere predicts that with AVOD, SVOD and hybrid combining, the broadcast TV space will also increasingly compound in 2021. That means is said an acceleration of collaborative services allowing broadcast channels to retain competitive edge in the crowded streaming market. BritBox and Salto-style were cited as examples of the joint-venture streaming platforms that could liberate broadcasters from free-to-air business models and the geographic constraints of a single territory. Expect these models, already common in Europe, to spread widely in 2021. The study also expects the content offer within single streaming platforms to increasingly compound in 2021. That it said would mean non-niche streaming services looking to combine entertainment content, drama, reality, documentary, news, kids and sport in single services becoming prevalent. Such services will better meet the demands of the streaming audience.

“AVOD, studio-direct streaming launches, the strengthening of local and broadcaster-led streaming, and the turbo-boost that came out of the blue in the form of Covid-19 have brought the industry to a pivot point,” noted Ampere Analysis research director Guy Bisson. “That pivot point will lead to a shift in thinking that will change the way content creators, distributors and content aggregators, platforms and channels think about streaming in the wider TV market. In 2021, compounding is here to stay in every portion of the streaming value chain.”