The United States viewers will spend more on streaming video than pay-TV for the first time in 2024, according to the latest research from Strategy Analytics.
According to the report, U.S. Subscription TV Forecast, consumer spending on traditional pay-TV services fell by 8% to $90.7B in 2020 and will decline further to $74.5B in 2023.
By contrast, spending on streaming services (such as video-on-demand and internet-delivered subscription TV) rose by 34% to $39.5B in 2020 and will reach $76.3B in 2024, passing pay-TV for the first time.
By 2026 the report predicts that pay-TV will account for only 40% of spending on video and TV services, compared to 81% ten years earlier.
This continued shift in consumer expenditure is the most important sign of the transformation in the television and video business which is engulfing content producers, aggregators, distributors, and technology partners.
Growth metrics in subscription video-on-demand (SVOD) usually focus on numbers of subscriptions, but this ignores what matters most – money. In spite of the many challenges it has faced, pay-TV still commands much higher monthly revenues from its declining base of customers than from any single SVOD service.
Nevertheless, as more households add new SVOD services while cutting the pay-TV cord, revenues will inevitably shift further away from legacy pay-TV.
“The revenue picture gives the best illustration of the relative strength of new and old businesses,” says Michael Goodman, Director, TV & Media Strategies.
“The fact that viewers are willing to divert an ever-increasing share of their entertainment wallet away from pay-TV and towards new internet-based services demonstrates that the future lies with streaming video services rather than legacy pay-TV players.
This is a long-term transition, but there is no doubt that the writing is on the wall for pay-TV as we have known it for more than 40 years.”