BOSTON: The rate of increase in U.S. consumer spending on streaming video subscriptions has slowed, indicating that the market is \u201capproaching saturation,\u201d according to research firm Strategy Analytics.<\/p>\n
This year, American consumers are expected to spend $6.62 billion on video streaming services. This is an increase of $1.19 billion on 2015, down from the $1.21 billion increase last year.<\/p>\n
\u201cAlthough the change in increase is relatively small, its direction is extremely significant,\u201d says Michael Goodman, Strategy Analytics\u2019s digital media director. \u201cIt shows that, whilst actual market saturation is a few years off yet, the domestic U.S. streaming subscription market is now on the backside of the adoption curve. The incremental increase in annual $ spend will decline from here on.\u201d<\/p>\n
The firm is projecting a $1.04 billion rise next year, with the increase falling to just over $500,000 in 2021.<\/p>\n
Almost 60 percent of U.S. broadband homes are streaming subscribers. Goodman expects saturation point at 85 percent\u2014\u201csimilar to saturation levels for pay TV. Within five years, annual growth will fall below 8 percent.\u201d<\/p>\n
Netflix is out front with 53 percent of subscriptions, well ahead of Amazon Prime\u2019s 25 percent and Hulu\u2019s 13 percent. Close to 40 percent of broadband homes paying for a video streaming service have at least two subscriptions.<\/p>\n
\u201cThis multi-subscription behavior means growth relies on cannibalizing other services or getting people to subscribe to more than one\u2014and companies seem to be betting on the latter,\u201d says Goodman. \u201cMost of the new services being launched today are in the $2 to $5 range, clearly designed to be complementary to a Netflix or Amazon. The domestic situation is also a huge reason why international expansion is so important, this is underscored by Amazon\u2019s recent video initiatives, and is particularly relevant for Netflix, who has the least room to grow in the U.S.\u201d<\/p>\n
This year, video streaming is expected to account for 35 percent of consumer spend on home video. DVD\/Blu-ray purchases will have a 30 percent share (down 7 percent), generating revenues of $5.67 billion. Disk rentals will account for 14 percent of consumer spending, a 10-percent drop to $2.75 billion. The amount of money on downloading to own will be up 17 percent to $2.2 billion, while downloading to rent will fall 5 percent to $1.84 billion. These two options will have a combined 22 percent share of consumer spending.<\/p>\n
Overall home entertainment spending this year is expected to be up by 3.6 percent to $19.09 billion, an average of $13.42 a home per month.<\/p>\n","protected":false},"excerpt":{"rendered":"
BOSTON: The rate of increase in U.S. consumer spending on streaming video subscriptions has slowed, indicating that the market is \u201capproaching saturation,\u201d according to research firm Strategy Analytics.<\/p>\n","protected":false},"author":290,"featured_media":7062,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[69],"tags":[213,675],"class_list":["post-7061","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-top-stories","tag-ott","tag-strategy-analytics"],"yoast_head":"\n