North American SVOD Market to Hit 110 Million Subs by 2021

LONDON: Revenues from OTT TV and video in Canada and the U.S. are forecast to reach $24.39 billion in 2021, according to Digital TV Research.

This is up from the $2.67 billion in 2010 and $15.39 billion in 2015. The North American SVOD sector is by far the most mature in the world, with 81.81 million SVOD subscribers by end-2015. These findings were released in the latest North America OTT TV & Video Forecasts report.

Simon Murray, report author and principal analyst at Digital TV Research, said: “It is important to stress that these figures are gross—some homes take more than one SVOD platform—especially in the U.S. We do not believe that 86 percent of U.S. TV households or even 97 percent of U.S. fixed broadband households will be SVOD subscribers by 2021. From the 101 million U.S. total in 2021, we forecast that 25 million will be secondary SVOD subscriptions. Therefore, the average U.S. SVOD user will pay for 1.33 subscriptions. Putting it another way, there will be 76 million U.S. primary SVOD users by 2021.”

Murray continued: “We have included half of the Amazon Prime fee as an SVOD subscription to homes that we estimate take Amazon Video (about 70 percent), even though homes are not directly paying for Amazon Video.”

Canadian and U.S. SVOD revenues will surge from $0.58 billion in 2010 to $6.26 billion in 2015 and onto $9.16 billion in 2021. Online rentals will continue to take a hit as SVOD grows. OTT TV and video rental revenues climbed from $708 million in 2010 to $2.02 billion in 2014. However, revenues are expected to decrease from then on—to $1.74 billion in 2021. Download-to-own (also known as electronic sell-through) buying will not be as affected by SVOD as rentals. DTO revenues are forecast to be $2.5 billion in 2021, up from $279 million in 2010 and $1.5 billion in 2015. Advertising on OTT sites (AVOD) will become the main OTT revenue source in 2018 as the SVOD sector matures. Advertising on OTT sites generated revenues of $5.65 billion in 2015—quintuple the $1.11 billion in 2010. Growth will continue, reaching a total of $10.98 billion in 2021.