Study: Netflix & Amazon to See Revenues More Than Double

HAMPSHIRE: New data from Juniper Research has found that revenues from SVOD services such as Netflix and Amazon are set to more than double from $14.6 billion this year to $34.6 billion in 2021.

Juniper’s latest report, Digital TV & Video: Network and OTT Strategies 2016-2021, found that SVOD providers can expect to see substantial returns on their expansion and growth strategies, as more countries and markets move to this method of video consumption, in a continual move away from linear, scheduled TV.

While SVOD continues to draw customers away from traditional providers, networks are now seeking to diversify and adapt through “cord-shaving,” with services such as YouTube and Hulu seeking to offer some linear cable streaming as part of subscription packages in 2017. The concept is to offer “skinny bundles” of content that are smaller packages, offered at a cheaper price via internet-delivered services.

The report also examined Netflix’s international growth. The service saw rapid expansion in January 2016, launching in 130 new markets simultaneously, bringing its total coverage to 190 countries, yet international subscriber growth lacks pace. Netflix’s expansion has resulted in price increases, but the beneficiaries may ultimately be the provider’s rivals if the competitor price differential becomes too great, the report states.

Research author Lauren Foye explained: “Whilst Netflix has expanded its coverage globally, the test will be whether it can meet its original content production costs, as well as provide quality content to consumers. It is believed that U.S. rival Hulu is now close to offering the same amount of content as Netflix, and others are pushing new models—such as Amazon’s monthly subscriptions to Prime Video, and YouTube Red subscriptions for exclusive content.”