Global SVOD revenues are expected to grow nearly 61% to $32.18 billion in 2021 from $20 billion in 2015, a whopping 18X the $1.74 billion seen in 2010, with the APAC region being a key growth driver.
That revenue growth is reflected in strong consumer uptake globally, as the number of SVOD homes is forecast to reach 428 million, up from 248 million at the end of this year and 177 million in 2015, according to Digital TV Research’s Global SVOD Forecasts report.
DTVR forecasts Netflix to remain the largest single service, with subscribers increasing to 117.8 million by 2021 from 70.8 million in 2015 (with the number of international customers exceeding U.S. customers by 2018), followed by Amazon at 69.2 million from an estimated 33.5 million in 2015. Digital TV Research estimates 60% of Amazon Prime subscribers watch video, so half the Prime subscription fee for these subs has been allocated to video.
Subscription revenues for Netflix, meanwhile, are expected to double from $6.37 billion in 2015 to $13.14 billion in 2021, with 52% of those revenues coming from North America.
Much of Netflix’s international growth is being facilitated by distribution partnerships with approximately 79 pay TV, telco or mobile operators across 44 countries.
“These partnerships include multinational deals with Liberty Global, Millicom/Tigo and Telia,” said Simon Murray, principal analyst at Digital TV Research.
But the real growth – exceeding 230% -- will come from “other” services around the globe, many of them in the APAC region and many of those already pursuing a strong mobile strategy.
Many of the countries in the APAC region already are outpacing more mature markets in terms of mobile penetration as robust mobile networks are easier and less expensive to deploy that wired networks in much of the region.
The U.S. (127 million subscribers by 2021) will remain the SVOD market leader by some distance, although China (74 million in 2021 – up by 34 million on 2016) will record strong growth to close the gap.
“North America supplies most of these subscribers at present, but Asia Pacific will become the top region by 2019,” Murray said. “This comes despite Netflix being unlikely to secure direct access in China and only making a limited impact in other major population centers such as India and Indonesia. There are some large SVOD platforms in Asia Pacific that have been active for some time.”
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