Online Video Subscription Services Will Reach 1.7 Billion in 2023
Despite the economic uncertainty, cost of living crisis, and saturation of video services in some countries, 2023 is on track to be a good year for subscription video-on-demand (SVOD) services according to Omdia. “Moving on from the impact of COVID, the introduction of the ad tiers and an abundance of new content has meant that 2023 will be an important year for growth in SVOD and its subscribers,” says Maria Rua Aguete, Senior Director in Omdia’s Media and Entertainment practice.
“2020 was a boom year for online video streaming, due to the pandemic and subsequent outdoor limitations which resulted in more than 300 million new global subscription online video services. SVOD has grown at one of the fastest rates on record. In fact, in absolute terms 2020 added more subscribers to the video-on-demand industry than at any other point in history and most likely, at any point to come,” added Rua Aguete.
However, all industries and economies tend to move between waves of growth and pools of stagnation and SVOD is no exception. While 2020 was a year for the records, 2023 will be a year of industry-wide cooling despite the myriad of services coming from big Hollywood players. The launch of advertising tiers does mean that for many of these players 2023 would still be a year of growth and SVOD players will add new 143m subscriptions – these figures represent 50% of what was achieved in 2020 the record year. Even in countries like the USA where subscription video services have reached maturity, Omdia expects almost 40m new SVOD subscriptions.
“The biggest battle services will face is the continuing rise in prices which may scare customers and could slow down growth. Thanks to the introduction of advertising tiers, SVOD players like Netflix could still grow in already saturated subscription markets such as the USA but also acquire subscribers in LatAm or APAC where the price was considered a reason not to subscribe. We expect 14% of all the subscriber growth in 2023 will come from LatAm,” concluded Rua Aguete.