Published February 21st, 2018
The overall US video and Pay-TV market continues its healthy overall growth and is set to reach $140 billion by the end of 2018, according to Futuresource Consulting.
Whilst the US is a global leader in digital adoption, it continues to have a well-balanced market overall, with an array of formats, platforms, services and business models that is unsurpassed globally.
2017 was characterized by many notable announcements and initiatives in the video and related media space; the introduction of Movies Anywhere increased the availability of 4K UHD content and renewed discussion surrounding digital movie release dates provide an intriguing backdrop for the market in 2018.
In addition, the renewed push on direct-to consumer-services, media industry acquisitions and consolidation and regularity impact (e.g. Net Neutrality), will ensure that the landscape in 2018 will continue to evolve.
Pay-TV, largely through increased ARPU rather than subscriber growth, is contributing the most to overall growth in wider video consumer spend, SVoD continues to provide an increasingly significant contribution.
“The SVoD culture continues to strengthen, Futuresource estimates that there are now 125 million SVoD subscriptions in the USA,” said David Sidebottom, Principal Analyst at Futuresource Consulting.
Although, consumer spending is still just 10% of the total Pay-TV market. Further growth is expected in 2018, driven by continued steady growth in established services and the quick expansion of a plethora of less established services, with platforms such as Amazon Channels helping drive this momentum.
The Pay-TV sector remains immense at over $100 billion in 2017, although it remains challenged. The much-discussed cord-cutting phenomenon has been apparent in 2017 to a small extent, with subscriptions expected to fall by 1% once more in 2018. In the midst of cord-cutting, key Multiple-Service Operators (MSOs) in the market have developed Pay-TV lite services, combining the extended reach of SVoD with the scheduled component of Pay-TV.
Broadband TV news
Aug 27, 2018
Oct 26, 2018
Ad-funded VOD (AVOD) is outpacing other paid media with spend set to double to $47 billion (€41.2bn) by 2023 worldwide, according to WARC’s latest Global Ad Trends report.
More broadly, both consumer and advertiser investment in OTT platforms is rising: globally, spend is projected to reach $129.3 billion in the next five years.
As a medium, AVOD is still young, though notable examples of Hulu, HBO Now, and Sony’s Crackle, as well as reported interest from Amazon, hint at its future power.
Compared to other paid media in WARC’s International Ad Forecast, AVoD is growing faster. The expected $23.8 billion in brand investment that AVoD will receive this year equates to a 5.2 per cent share of global adspend, but spend has increased year-on-year. As a percentage of total OTT spend (estimated by Digital TV Research at $68.7 billion this year – up 29 per cent from 2017), AVoD will account for 34.7 per cent.
“Consumers’ voracious appetite for video content anywhere, on any device, has been propelled by SVoD services such as Netflix. But it is AVoD platforms which present the opportunity for advertisers to marry rich consumer data with pinpoint targeting during engaging content,” says James McDonald, Data Editor, WARC. “This is why AT&T and Amazon are exploring moves into the AVOD sector next year, with the ultimate aim of taking the lion’s share of a market expected to be worth $47 billion by 2023.”
At the strategic level, consumers’ appetite for cross-device streaming is creating an impact. A full 81 per cent of consumers now say it is important that they can watch TV programmes whenever they want.
The wide array of publisher specs, insufficient lead time required to track down all creative assets and a lack of standardised measurement when buying cross-channel audience-based inventory are cited as major concerns by practitioners.
As a result, OTT is not currently front of mind when building media strategies; just a quarter (26 per cent) of US CMOs regard OTT as either very or extremely important to their plans. This despite evidence showing integrated campaigns are 31 per cent more effective at brand building.
Source: Report: AVOD spend to double in next 5 years
Jan 05, 2018