The average annual household spend on film and TV in the U.S. is expected to have peaked at $1,150 last year, per new data from Ampere Analysis, with both SVOD expenditure declining and cord-cutting increasing.
Ampere indicates that 2023 may mark the inflection point at which per-household SVOD spend no longer compensates for continued declines in pay-TV subscriptions. Average annual spend per U.S. household on video services is set to fall by 8 percent by 2027.
Last year, annual bills for video content averaged $1,146 per home in the U.S., boosted by consumers returning to theaters and SVOD outlay rising by 18 percent to $374 per home. SVOD revenue growth will slow this year amid economic woes and market saturation. Pay TV investment per home, meanwhile, will drop below $650 for the first time since 2006.
The dynamics in Western Europe are different, Ampere reports, with household expenditure on SVOD set to rise by 11 percent by 2027 and a stable pay-TV market. Of note, Norway’s per household spend on video is set to overtake the U.S. in 2025.
Maria Dunleavey, senior analyst at Ampere Analysis, noted: “Spend on video has finally hit its limit for U.S. households. As the U.S. subscription OTT market edges closer to saturation point and demand for pay TV continues to fall, annual spend per household on video services has tipped into decline. By 2027, unless streaming services can sustain significant price inflation, U.S. households will be investing almost 90 dollars less per year on video services. Recent moves from TV groups to focus on hybrid tiers and free ad-supported video services represent one approach to compensating for this downward pressure. By contrast, in Western Europe, pay TV expenditure is more stable and the expansion of SVOD continues to drive spend on video. For U.S. groups, capitalizing on this international growth is increasingly key given the pressures on domestic income.”