Subscription TV market ‘to plateau’ by 2024

The US subscription video on demand (SVOD) market is expected to plateau by 2024.

The stagnation is anticipated due to price competition in a crowded streaming market and lower average revenues per user (ARPUs) as platforms like Netflix and Disney+ introduce less expensive ad tiers, according to the latest forecast from Digital TV Research.

The US SVOD market is forecast to grow by 30% (an increase of $13bn) between 2021 and 2024, the company’s research stated.

The expectation helps to explain why streaming services are being driven to instituting ad tiers to provide a new revenue stream as subscriptions drop amid high competition and churn.

Digital TV Research predicts Netflix will have 63 million US subscribers by 2027, which is down by 4 million compared with 2021. Hulu, Disney+, HBO, and Paramount+ will each boast 40-50 million subscribers by 2027, though the report notes that “some consolidation” in likely.

Last week, Bloomberg reported Netflix is considering pricing its ad tier between $7-to-$9/month. Netflix currently costs $9.99/month for a basic subscription, $15.49/month for a “standard” subscription, and $19.99/month for a “premium” subscription, which adds additional features.