Streaming likely to overtake pay TV globally in 2025, says report

Streaming is beginning to look like pay TV 2.0

The video streaming business is maturing globally. This year will be the first when streaming video generates more revenue ($213 billion) than pay TV ($188 billion).

 

Every major subscription-based streaming service has introduced an ad-tier and this push into the free world will continue. Growth will come from being more like TV – in distribution, pricing and even in programming to a great extent.

 

With ad tiers, lots of sports and bundled distribution, all the five major US streamers — Netflix, Disney+, Paramount+, Amazon prime Video and Max — are beginning “to look like pay TV 2.0,” says Tony Gunnarsson, senior principal analyst, TV, video and advertising for London-based, Omdia, a global analyst and advisory firm.

 

Its latest, ‘2025 Trends to Watch’ report states that the streaming wars are over, advertising is in and standalone subscription video on demand (SVoD) bundles will be the new reality.

 

“These global trends won't be directly replicated in India. According to our forecast, pay-TV will not only remain the dominant sector for revenues through the late 2020s but they may also grow over the foreseeable period,” says Gunnarsson. 

 

The report details the growing ‘linearisation’ of streaming in 2025.

 

The big five will have a combined total of 818 million paid subscriptions globally, of which nearly 250 million — or 30 per cent — will be on an ad-tier. 

 

Last year, 24 per cent of the SVoD revenues in America came from ad-tier. Entry-level SVoD subscriptions all come with advertising and consumer tolerance of advertising is likely to increase, says the report.

 

This broadening of the pay OTT offering means that, for new markets, it is unlikely that the big global services will ever launch as direct-to-consumer services. Instead, they will opt to partner local providers, whether pay-TV or streamers. Note that HBO’s Max is yet to launch in India. Given the ad-dependent nature of the Indian market, much of this will play out here too. 

 

“The industry has somehow lost sight of customer needs. In the West, direct-to-consumer doesn’t really help anyone. What does work is greater bundling and packaging of services for customers. Until this (streaming) looks and feels like pay-TV used to be, it will be cut-throat for everyone,” adds Gunnarsson.