As the market for subscription video services (SVOD, aka Netflix, Hulu, Apple TV+. etc.) continues to adjust to slower growth with the merger of HBO Max and Discovery+ and Netflix’s launch of an ad-supported subscription tier, one research firm thinks the trend will continue, resulting in “flat” revenue growth over the next five years.
Despite being the world’s most mature market, U.S. SVOD revenues will grow by $14 billion from $43 billion in 2021 to $56 billion in 2024. However, growth will be almost flat from 2024 to 2027 due to price competition and lower ARPUs from Netflix’s hybrid AVOD-SVOD tier says European research firm Digital TV Research.
Simon Murray, Principal Analyst at Digital TV Research thinks that Netflix will remain the SVOD revenue winner with the launch of its ad-supported subscription tier later this year. Murray predicts that Netflex will lose $1.4 billion in SVOD revenues between 2022 and 2027 due to lower ARPUs from 2023, but that it “will more than recoup these SVOD revenue losses with AVOD sales.”
Netflix will have 63 million subscribers by 2027—down by 4 million on 2021. Hulu, Disney+, HBO and Paramount+ will each boast 40-50 million subscribers by 2027. Some consolidation—mergers and closures—is likely, the research firm concluded.
For more information on the North America SVOD Forecasts report, contact: Simon Murray, simon@digitaltvresearch.com.
