By George Winslow
New studies from Convergence Research Group highlight the ongoing massive shifts to OTT and streaming content with a prediction that US OTT subscription revenue will grow by 17 per cent to US$69 billion in 2024 and that 60 per cent of all US homes didn’t have a pay TV subscription at the end of 2023.
Convergence predicts that these cord-cutter/cord-never homes could rise from 79 million at the end of 2023 to 75 per cent of all US households at the end of 2026.
The data is from two nearly released studies: “The Battle for the American Couch Potato: OTT and TV” and “The Battle for the American Couch Potato: Bundling, TV, Internet, Telephone, Wireless.”
The subscription revenue projections are based on an analysis of over 90 OTT services (over 50 providers), led by Netflix, Disney/Hulu, Amazon, WBD. The studies are also predicting that double digit growth rates will continue through at least 2026.
However, Convergence is forecasting that net paid US OTT subscriptions added per annum will run on average 40 per cent less 2024-2026 than 2021-2023, even with 2024 being a stronger projected year for net subscription additions than 2023. It is forecasting that total US paid OTT subscriptions, which they estimate reached 497 million YE2023, will continue to grow in the single digits (down from its pre-2023 double digit growth).
The reports also take a deep dives into changes in OTT subscription offerings with a focus on advertising, price, profitability, explored in depth in this Report, have logically followed. Based on the 10 largest OTT providers, Convergence is reported average US price increases were 11% in 2022 and 2023 and that price hikes in 2024 will be similar. That being said OTT offers with advertising represent a significant cost savings (on average 45% less) to similar offers without advertising, the report found.
The studies also estimate that 2023 saw a decline of 7.76 million US cable, satellite, telco TV subscribers, down 12 per cent, and forecast a decline of 7.1 million TV subs in 2024 down 13 per cent. The researchers are expecting an even more rapid decline of 15 per cent in 2026.
That has also produced significant 2023 declines in cable, satellite, telco TV access revenue of 10 per cent to US$77.6 billion. They are forecasting another 11 per cent decline in 2024 and 13 per cent in 2026.
Convergence also estimates over 3.7 million US residential broadband subscribers were added in 2023, higher than 2022, and revenue grew 6 per cent to US$90 billion. But its 2024-2026 sub forecasts are more moderate. While Cable continues to maintain the lions’ share of residential broadband subs, Cable’s annual share of net additions has fallen precipitously due primarily to T-Mobile and Verizon, the reports found.
