The Specialty SVOD category has seen significant growth in recent years, outpacing Premium SVOD services despite a smaller base, according to Antenna’s latest "State of Subscriptions” report. This growth is attributed to several factors, including the increasing adoption of streaming as the primary mode of video viewing and the success of distribution channels like Amazon Channels in promoting niche streaming services.
Specialty SVOD subscriptions have grown at a robust rate, increasing by 26.9% year-over-year (YoY) in 2023 and 19.8% into 2024. This compares favorably to the Premium SVOD segment, which saw a more modest growth of 17.0% YoY in 2023 and just 7.7% into 2024. As of mid-2024, 31% of SVOD consumers had interacted with at least one Specialty SVOD service, showing a growing acceptance of niche streaming platforms among a broader audience. The total number of Specialty SVOD consumers rose from 24.5 million in Q2 2022 to 51.4 million by Q2 2024, representing a 110% increase.
Total Speciality SVOD Gross Additions are up. There were 24M Gross Adds in FY 2022 and 32.2M in FY 2023; for 1H’24, Antenna observed 18.4M Gross Adds to the Speciality category. But with dozens of Specialty streaming brands, Share of Gross Adds is split across a wide variety of services. In Q2’24, AMC+ captured 15% of Gross Adds, followed by MGM+ with 14%, Crunchyroll with 12%, Britbox with 8% and BET+ with 7%. The remaining 20 services categorized by Antenna as Speciality SVOD captured 5% or less each of Gross Additions in Q2’24.
Amazon Channels has been a significant driver of growth in the Specialty SVOD space, accounting for 58% of all Specialty SVOD sign-ups through the first half of 2024. The platform's success is largely due to its user interface, which emphasizes individual shows rather than services, aiding discovery across its extensive content library. In total, Amazon Channels added 3.1 million Specialty SVOD subscriptions year-over-year, compared to 2.6 million added by other distributors.
Specialty SVOD services tend to have higher churn rates compared to Premium SVOD. In June 2024, the churn rate for Specialty SVOD was 7.6%, while Premium SVOD had a lower churn rate of 4.6%. Since 2022, Specialty SVOD churn has fluctuated between 5.6% and 9.3%, whereas Premium SVOD churn has ranged from 3.9% to 6.0%. Notably, 66% of Specialty SVOD users subscribe to only one service, suggesting a preference for specific niche content over a broad array of options.
Ad-supported tiers and bundling strategies have shown potential as growth levers for Specialty SVOD. For instance, 36% of AMC+'s gross additions in Q2 2024 were ad-supported. Bundling, however, is still in its early stages and has had limited impact so far. Examples include bundles like Starz and MGM+, and AMC+ with MGM+, but uptake remains modest, with only 9% of MGM+ subscribers participating in bundles, followed by 5% for AMC+ and 4% for Starz.
While the Specialty SVOD sector faces challenges like high churn and modest bundling uptake, its growth continues to outpace Premium SVOD. The report suggests that further exploration of bundling and ad-supported tiers could enhance subscriber retention and growth. Specialty SVOD services like AMC+ and BET+ have a significant opportunity to convert “Curious” subscribers into “Committed” ones, a dynamic that could prove critical as the market matures.
The Specialty SVOD sector has demonstrated impressive growth, challenging the notion that niche services cannot thrive in a crowded streaming market. By capitalizing on the shifting dynamics of consumer behavior and leveraging strategic distribution through platforms like Amazon Channels, these services have carved out a distinct and growing segment of the streaming landscape. However, challenges such as higher churn rates and limited bundling success indicate that there is still considerable room for innovation and refinement in their strategies. As the market evolves, the ability to effectively convert curious subscribers into long-term, committed customers will be crucial for sustained success. The continued exploration of ad-supported tiers and bundling opportunities could unlock new pathways for growth, ensuring that Specialty SVOD services remain a vital and expanding part of the broader SVOD ecosystem.
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