Ampere Analysis: Room for Another 3 Billion SVOD Subs


The latest figures from Ampere Analysis suggest that there is room for 3 billion additional streaming subscriptions across the world’s largest media markets, though some territories are moving toward a “stacking ceiling.”

Ampere’s latest research looked at 20 of the largest TV subscription markets worldwide to establish the theoretical ceiling for SVOD stacking behavior. From this, Ampere estimates that the maximum ceiling for SVOD services per household is highest in the U.S., at roughly eight. In Europe, the figure is lower, at between two to five services per household.

Despite cord-cutting, the average U.S. household has continued to spend a nearly identical amount on TV services every year, $900, as they switch from individual high-cost cable and satellite contracts to multiple lower-price SVOD services.

Daniel Gadher, research manager at Ampere Analysis, said: “Even as we begin to see growth in SVoD services in emerging markets, our analysis shows that opportunity for expansion is actually still a very solid proposition in established territories. As cord-cutting continues, the US stacking ceiling is theoretically as high as eight services per average household, while in developing markets like Brazil it is far lower, at just 1.5.”

A variety of factors will limit how close individual markets will get to this ceiling. One issue is sports. Ampere’s past analysis has indicated that OTT players are unlikely to be able to wrangle control of major domestic events from pay-TV operators and networks in most developed markets. As a result, consumers who want to watch sport will have to continue subscribing to pay-TV services. This reduces the available budget for SVOD.

After accounting for factors such as sports and future growth in spending, markets such as the U.K. and Germany have an average household capacity of roughly three services at current price points. This apparently low capacity still translates into a sizeable number of subscriptions, 88 million capacity in the U.K. and a 124 million capacity in Germany. In the U.S., even four to five services per household would translate to a total of 510 million to 640 million possible subscriptions. In total, the firm concludes, for the markets assessed, a realistic capacity is as high as a further 3 billion subscriptions.

Gadher added: “To make the most of this capacity, OTT players first need to demonstrate that they are a viable replacement for existing paid-for TV services. This process is ongoing in the US and Canada, but elsewhere in the world, pay TV has remained resilient. But as U.S. studio content increasingly moves to the online world, the opportunity for new players to take a share of consumer entertainment spending, even in already busy markets, improves.”