EXCLUSIVE FROM THE ARCHIVE—In a Nutshell Series 2023

Based on an exclusive report by Tony Gunnarsson @Omdia, TV, Video & Advertising, for ATF 2022

NUTSHELL

• SVOD has caused a great deal of creative destruction, as customers switched from expensive pay-TV to cheaper online alternatives
• The immense popularity of Netflix has forced media companies to embrace streaming-first strategies
• With fierce competition from new D2C services, Netflix has been forced to abandon its 'no ads' philosophy

ASIA

• More people now watch SVOD than pay-TV
• Between 2019 & 2027, Asian SVOD subscriptions will more than double to 860 million (from 421 million)

KEY DRIVERS

• Major services like Netflix, Amazon, Disney+,
• Major local players like Tencent Video, iQiyi and Youku Tudou

NOTE:

• SVOD growth rates are already decelerating
• In Asia, the annual growth rate for SVOD will drop into single digits in the next few years

ADVERTISING

• 2023 will be a key year for SVOD
• By 2027, 2/3s of Netflix users will be ad-tiers; for Disney+ it will be as high as 75%
• Within just a few years from now, most people watching streaming video will be exposed to adverts. Meanwhile, the D2C revolution is quietly coming to an end

Source: Omdia

TELCOS

• Around the world, telcos are increasingly bundling, aggregating, and curating SVOD services
• By 2027, operator bundling will be responsible for over 500 million subscriptions
• In Asia, the split between direct retail and indirect wholesale is expected to be even higher

PRICING

• For most consumers, the next few years will bring about changes to how they watch premium online video streaming services, how they pay for them, how much they pay, and who they pay
• Customer perception of pricing will undergo a radical change as customers will each individually have to undergo a cost-and-benefit analysis whether to opt for a more expensive subscription without adverts, or whether the lower price with adverts offers a better value for money

Omdia firmly believes most consumers will opt for the cheaper ad-supported alternative—this will be the only way that they can afford to access multiple 'must have' SVOD services.