Online Video Subscriptions to Top Two Billion by 2027

NAB

Online video subscriptions will reach two billion by 2027 — and with pay-TV subscriptions still exceeding one billion, the combined global total will exceed three billion, according to new data from Omdia.

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Although the outlook remains very positive, it is clear online video services cannot take growth for granted. Netflix, for example, is projected to lose two million customers in the second quarter of 2022 alone.

Omdia is forecasting 1.48 billion online video subs by the end of 2022. With new services continually entering to market and, crucially, major players still only part of the way through their global expansion efforts, SVOD expansion is set for several years.

“Disney+ has enjoyed an incredibly successful launch but there are several more attractive territories for it to enter over the next couple of years,” says senior principal analyst Adam Thomas. “And the same goes for Paramount+, Peacock and several others. The prospects for the alliance of HBO Max with Discovery+ also looks exciting. There are numerous reasons to be positive for online video’s prospects over the next few years which are reflected in our forecasts.”

Omdia’s latest research showed mixed fortunes for pay-TV. The sector is growing in 55 countries, declining in 41, and static in five. Over the next five years the analyst expects those contrasting fortunes to continue, with countries like Indonesia continuing to post solid increases, while others — most notably the US — seeing ongoing decline.

The consultancy firm forecasts global pay-TV numbers to drop 1.9% from 1.03 billion in 2022 to one billion in 2027.

“The one small note of caution I would add is that with pay-TV as a whole plateauing, the TV and video business is becoming increasingly reliant on growth from online video,” Thomas added. “But with that business having been built on high content investment aligned with low subscription prices, a price-sensitive public has come to expect a lot of bang for their buck.

“The content costs versus pricing balancing act is a tricky one to navigate and we’ve already heard from Netflix that it expects to lose two million customers in this quarter. It is quite clear that constant growth for online video is by no means guaranteed.”