In 2021, 80-82% of all US internet households subscribe to at least one streaming service and nearly half of all broadband households (49%) subscribe to four or more OTT streaming services, an increase of 18% in one year. Currently, only 57% subscribe to a traditional pay-TV service like AT&T or Comcast. This is a dramatic drop from almost ten years ago in 2012 when 87% of households subscribed to traditional pay-TV services.
These enormous shifts in the video services landscape follow more than a century of evolving consumption patterns for video content across multiple mediums. There has been much innovation over the years, but the year streaming debuted in 2005 changed the trajectory of the modern video service industry. It is no coincidence that DVD sales peaked the same year YouTube launched, and pay-TV subscriptions peaked just 3 years after Netflix launched in 2007. The evolution of streaming video has created choices for consumers in how, when, and what they watch. The ease of trialing, subscribing, and cancelling services has created new dynamics for content companies and service providers.
Pay-TV subscriptions and revenues are on a continuous decline as consumers embrace OTT services. Traditional pay TV will decline to 76.7 million households by 2024, the lowest penetration in a decade and a 27% drop from 2014.
Traditional pay-TV companies are making their move to streaming; they are also rebranding, making big acquisitions, and forming new partnerships. As they enter the streaming market, new OTT services join more than three hundred direct-to-consumer streaming services in the US market alone.
The immediate outlook of the video services space will feature more consolidation, partnerships, a focus on retention and reach, and more money spent on content. Also, a continued focus on business model experimentation as more content owners and service providers try out new bundles and hybrid services.
Parks Associates new research report, Video Services: State of the Market, examines the top trends in the US and Canadian video service markets and the forces that will affect the market over the next year.
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