A new report by Juniper Research has found that there will be nearly 2 billion active subscriptions to on-demand video services in 2025; a 65% increase over the end of 2020. The primary engine for this growth will be from traditional broadcasters, who are increasingly turning to streaming services in order to extend their reach and compete with streaming giants such as Netflix and Amazon Prime Video.
The new research, OTT TV & Video Streaming: Evolving Trends, Future Strategies & Market Forecasts 2020-2025 Research, notes that traditional broadcasters are turning to hybrid services. This includes a combination of on-demand subscription- and advertising-supported monetisation platforms, such as NBC’s Peacock, and CBS All Access, which offer tiered services that still generate subscription revenue but show advertisements in lower-priced bands in order to keep end user prices down.
Juniper Research anticipates that these services will account for USD1.4 billion in advertising spend in 2025.
Further Monetisation to Combat Subscription Fatigue
The report also notes that, as subscription services become increasingly prominent, particularly in the US, different models will be needed to combat subscription fatigue. The report estimates that in 2020 there was an average of four SVOD (subscription video on-demand) subscriptions per household in the US, but with growth slowing significantly from 2021.
“Thanks to this high level of market saturation, streaming providers need to keep their offerings competitive to retain subscribers”, notes research co-author Nick Hunt. “Hybrid monetisation is one way that VOD providers can keep their offerings low-cost, and therefore less likely to be dropped.”
Social Video Brings Lower Ad Growth
Additionally, the report shows that over 70% of streamed video sessions in the next five years will occur on smartphones, thanks to the emergence of social videos on platforms like TikTok. However, these do not yield a high number of advert slots per video watched, meaning that smartphone advertising spend will only grow at an average rate of 2% each year over the forecast period.