Much continues to be made of OTT threats on pay TV providers, with often dire predictions in tow. While acknowledging a fast and dramatically changing technological and viewer environment, Strategy Analytics (SA) says traditional pay TV providers will continue to dominate the U.S. and North American pay-TV market despite falling sales, however.
Overall, annual U.S. spending on subscription video and TV services in the U.S. will rise to a peak of $130.3 billion in 2019, the market research provider forecasts. OTT providers will account for less than 20 percent of consumer spending on pay-TV come 2022, however, SA predicts.
In sharp contrast, traditional pay-TV providers, including Comcast and AT&T, will rake in 80 percent of total market revenues come that time. That will total $125.7 billion in the U.S. in 2022 down from SA’s 2019 forecast peak, and include revenues from legacy pay-TV platforms as well as newer OTT and hybrid platforms and services, such as DIRECTV NOW.
Growth in annual revenues across emerging OTT players will decline as well, SA forecasts, rising at only a 4.4 percent rate by 2022.
“It’s not about subscribers, it’s about revenues,” says Michael Goodman, Director, TV & Media Strategies. “Focusing on Netflix subscriber numbers, impressive as they are, ignores the fact that pay TV ARPUs are still more than 10 times higher.”
Added VP and principal analyst David Mercer: “There is a long way to go before the winners can be announced. The long-term transition to IP-delivered video will allow many players to benefit, but understanding consumer needs and how to meet them will be critical to any successful strategy.”
Image courtesy of flickr user Javier Domínguez Ferreiro.