The number of subscription video on demand (SVoD) users has reached 1.5 billion as compared with 1.4 billion pay TV subscribers in 2022, according to GlobalData.
The size of the global market for SVoD, a video streaming service where viewers pay a monthly fee to access a library of content, was worth $103 billion in 2022.
The subscription video on demand is estimated to reach $155 billion by 2027, registering a compound annual growth rate (CAGR) of 8.5 percent between 2022 and 2027.
Revenue from traditional pay TV services (which include cable TV, satellite TV, and terrestrial TV) will decline from $218 billion in 2022 to $194 billion by 2027.
The number of video streaming subscribers volume expanded at a CAGR of 30 percent, compared to 4 percent for pay TV subscriptions between 2018 and 2022. This is primarily attributable to the cord-cutting trend as consumers transitioned from traditional cable, satellite, and terrestrial TV to SVoD platforms.
The push for exclusivity on SVoD platforms has intensified the content wars, and video streaming companies spend eye-watering amounts on content. Disney, for instance, spent $33 billion in 2022 alone, which equates to over five times the BBC’s entire $6 billion budget.
Streamers have begun to tighten their belts, but exclusive content remains a differentiator, and the industry remains under pressure to spend heavily to retain consumers.
Subscription-based streaming platforms have started shifting towards a hybrid model incorporating advertising-based video on demand (AVoD) or free ad-supported TV (FAST) to attract cost-conscious subscribers.
“This is unlikely to balance their books. The outcome is more industry consolidation,” Rupantar Guha, Principal Analyst at GlobalData’s Thematic Intelligence team, said in the research report.