What has happened?

Recent forecasts tip subscription video on demand (SVOD) will grow by 55% to circa 743 million over the next four years. It is projected that China will be the subscription powerhouse, however, the US will continue to drive the largest spend volume. Subscribers are expected to watch between 2-3 billion hours of ad-free SVOD per day, whilst linear TV will decline to similar numbers by this point.

Netflix is leading subscriptions (outside of China) and will make up 194 million (26%) SVOD customers globally by 2023.

The prediction for Europe where there are currently multiple established operators, Maxdome, Sky, Zattoo and Rakuten TV, is that the US juggernauts Netflix and Amazon will begin to make greater claims and local broadcasters will band together to challenge them. While China is expected to amass 245 million  SVOD subscribers (approximately 72% of the region), but with a low average subscription cost of only $2-$3 a month.

The Media Store Take

The combination of affordable – as evidenced in China – and quality content – as evidenced by Netflix’s two academy award wins – will further accelerate SVODs viewing numbers.
The SVOD market will continue to expand creating further fragmentation as broadcasters rethink their current models by potentially banding together to challenge the already established services eg: Netflix and Amazon.
And whilst we continue to see the erosion of traditional linear TV numbers broadcasters will need to reimagine their core assets and ecosystems to compete alongside the leading SVOD players. The shapeshifting media trend will, therefore, see us move to a landscape where Traditional TV may no longer exist.

Kirsten McMillan