Subscription video on demand (SVOD) services, such as Netflix and Amazon, are expected to more than double to $34.6 billion in 2021 from $14.6 billion this year.
Netflix sees US subscriber numbers level with top network providers such as DirecTV with 47 million and Comcast with 47.7 million.
SVOD providers can expect to see substantial returns on their expansion and growth strategies, as more countries and markets move to this method of video consumption, in a continual move away from linear, scheduled TV.
While SVOD continues to draw customers away from traditional providers, networks are seeking to diversify and adapt through cord shaving, with services such as YouTube and Hulu seeking to offer some linear cable streaming as part of subscription packages in 2017. The strategy is to offer content in smaller packages and at a cheaper price via Internet delivered services.
Netflix saw rapid expansion in January 2016, launching in 130 new markets simultaneously, bringing its total coverage to 190 countries, yet international subscriber growth lacks pace.
Netflix’s expansion has resulted in price increases, but the beneficiaries may be the provider’s rivals if the competitor price differential becomes too great.
“While Netflix has expanded its coverage globally, the test will be whether it can meet its original content production costs, as well as provide quality content to consumers,” said Juniper Research author Lauren Foye.
Netflix’s US rival Hulu is close to offering the same amount of content as Netflix, and others are pushing new models — such as Amazon’s monthly subscriptions to Prime video, and YouTube Red subscriptions for exclusive content.
Juniper Research said total TV and video data usage will grow more than five-fold from 2016 to 2021, as uptake of 4K increases download sizes.
Combined 4K SVOD and TVOD (Transactional Video on Demand, i.e. Pay per View and Download to Own) revenues will grow to account for 13 percent of total OTT revenues by 2021, according to Juniper Research.
