U.S. Streaming Revenues to Overtake Pay TV in Q3

In the third quarter of this year, revenues from streaming services, including advertising from hybrid subscription tiers, will overtake pay-TV subs revenues in the U.S. for the first time, according to new data from Ampere Analysis.

In 2028, the value of pay TV in the U.S. will be half of what it was at the peak of 2017, Ampere reports. The research firm notes that streaming subs topped pay TV in 2016 in the U.S., but revenue has taken longer to catch up due to SVOD’s lower ARPUs, currently a tenth that of pay TV.

U.S. SVOD streamers embracing hybrid ad tiers has helped to power subs growth growth and boosted revenue potential. Per Ampere, revenues from ad tiers will pass $9 billion in the U.S. this year, helped along by Prime Video’s new advertising tier.

Rory Gooderick, senior analyst at Ampere Analysis, noted: “Most major streaming services in the U.S. have launched their hybrid advertising tiers, which, along with increasing clamp-downs on password sharing, have been successful at reigniting growth in the streaming market. There is still a way forward for pay TV, however. Disney and Charter’s recent deal in the U.S., which gave almost 15 million Charter subscribers access to Disney+’s advertising tier, shows how the two businesses can work together to maximize streaming’s reach to domestic subscribers and highlights the importance of traditional distribution platforms as service aggregators. Longer-term contracts and the reduction in churn makes this an attractive proposition for streamers, while control over the billing relationship also means there’s something in it for the pay TV provider too.”