19 APR 2022

Why is SVOD no longer the only jewel in the media industry?

The subscription model is losing its power to drive long-term growth, and Kantar expects business models to diversify further in 2022, with a sole subscription offering becoming scarce.

Share

Over half of internet-connected consumers claimed to have used pay-TV or video streaming services “in the last week.” Of these, almost two-thirds (65%) said they watch two or more hours of paid-for streamed content daily, according to Kantar’s TGI Global Quick View study of consumers in 25 markets.

This amounts to a lot of eyeballs spending a lot of time glued to an increasing array of platforms – but it is not just global stay-at-home orders fuelling these 2021 trends. Over the last year, the growth has been driven by a wave of media mergers, expanded market choice, and adaptive approaches to content production and streaming options throughout the pandemic, the report says.

Some wonder how much further this can go, though, and at which point consumer choice becomes overwhelming. Yet talking about “subscription fatigue” does not make it true – satisfaction with value for money in video streaming has actually risen amongst US subscribers from 58% to 61% over the year, despite increased actual spend.

However, in last year’s report, Kantar predicted the increased importance of aggregators, and this has played out during the year. With the number of SVOD launches on the rise, smaller services do not feel confident enough to go it alone, and an increasing number are partnering with established cable and satellite TV operators to secure guaranteed subscribers at launch.

At the same time, this has given a new-found confidence to broadcasters and platform operators previously under pressure to maintain growth. For example, Sky has signed up Peacock, Paramount and Discovery+ as part of its launch strategies, cementing its power in Europe. Viewers are on board with this trend and want to be able to access their content through one unified system, Kantar noted.

According to Kantar, SVOD is no longer the only jewel in the media crown. The subscription model is losing its power to drive long-term growth. This is because competition has grown incredibly fierce, there is more competition for the same content, and prices are increasing amongst some SVOD platforms. In response, Kantar expects business models to diversify further in 2022, with a sole subscription offering becoming scarce.

“As actual viewing figures are publicly available, content owners and producers could command higher licensing and carriage fee negotiation rights than before. Meanwhile, platform consolidation will continue, driven by the need to offer more (and better) content bundles to lure viewers in a crowded marketplace,”  the report indicates.

Tags
Related News
subscribe

to Señal News Newsletter

MOST READ STORIES