As AVOD slugs it out with SVOD in the US, the biggest casualty is going to be traditional pay-TV which, says a report from Parks Associates, is set to decline to 76.7 million households by 2024, the lowest penetration in a decade and a 27% drop from 2014.
The fundamental finding of the Video Services: State of the Market report was that that both pay-TV subscriptions and revenues are on a continuous decline as consumers embrace over-the-top (OTT) streaming services. As a result, traditional pay-TV companies were making their move to streaming and are rebranding, making big acquisitions, and forming new partnerships. As they enter the streaming market, new OTT services were joining more than three hundred direct-to-consumer streaming services in the US market alone.
The research noted that with so much choice and no long-term contracts for streaming video services, churn across all OTT service providers is increasing, and services are struggling to retain their viewers. The Parks Associates data indicated that OTT subscription services average a 48% churn rate in the first quarter of 2022, a 10% increase in just two years.
“There has been substantial innovation over the years, but streaming’s debut changed the trajectory of the modern video service industry,” said Paul Erickson, director of research, Parks Associates, commenting on the Video Services: State of the Market report. “The evolution of streaming video has given consumers immense choice in how, when, and what they watch. The ease of trialing, subscribing, and cancelling services has created new dynamics and challenges for content companies and service providers.”
The research noted that with so much choice and no long-term contracts for streaming video services, churn across all OTT service providers is increasing, and services are struggling to retain their viewers. The Parks Associates data indicated that OTT subscription services average a 48% churn rate in the first quarter of 2022, a 10% increase in just two years.
“There has been substantial innovation over the years, but streaming’s debut changed the trajectory of the modern video service industry,” said Paul Erickson, director of research, Parks Associates, commenting on the Video Services: State of the Market report. “The evolution of streaming video has given consumers immense choice in how, when, and what they watch. The ease of trialing, subscribing, and cancelling services has created new dynamics and challenges for content companies and service providers.”
