Subscription TV market ‘to plateau’ by 2024

Subscription TV market ‘to plateau’ by 2024

The US subscription video on demand (SVOD) market is expected to plateau by 2024.

The stagnation is anticipated due to price competition in a crowded streaming market and lower average revenues per user (ARPUs) as platforms like Netflix and Disney+ introduce less expensive ad tiers, according to the latest forecast from Digital TV Research.

The US SVOD market is forecast to grow by 30% (an increase of $13bn) between 2021 and 2024, the company’s research stated.

The expectation helps to explain why streaming services are being driven to instituting ad tiers to provide a new revenue stream as subscriptions drop amid high competition and churn.

Digital TV Research predicts Netflix will have 63 million US subscribers by 2027, which is down by 4 million compared with 2021. Hulu, Disney+, HBO, and Paramount+ will each boast 40-50 million subscribers by 2027, though the report notes that “some consolidation” in likely.

Last week, Bloomberg reported Netflix is considering pricing its ad tier between $7-to-$9/month. Netflix currently costs $9.99/month for a basic subscription, $15.49/month for a “standard” subscription, and $19.99/month for a “premium” subscription, which adds additional features.

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