Netflix holds 20% of US streaming revenue, streaming to overtake pay-TV by 2025

Netflix revenue in the United States will top $14.5 billion in 2024, accounting for about 20% of all domestic over-the-top video subscription streaming revenue, according to new data from EMarketer. The tally exceeds the streamer’s closet rival Disney, which tops $13.96 billion when combining the annual domestic revenue of Disney+, Hulu and ESPN+.

Subscription streaming revenue is projected top pay-TV revenue for the first time in 2025, when including online TV platforms such as YouTube TV, Sling TV, and Hulu + Live TV, among others. Without online TV, streaming revenue won’t exceed pay-TV revenue until 2026.

Between 2020 and 2024, the share of total video subscription revenue that went to pay-TV decreased from 72.6% to 50.3%. Pay-TV prices have increased, but cord-cutting has skyrocketed, causing that legacy pay-TV subscription revenue to shrink between 6% and 7% per year.

Meanwhile, the “Digital Video Forecast & Trends Q1 2024” report found that Netflix’s domestic audience is saturated, with the service reaching more than 75% of all U.S. streamers this year. To generate incremental revenue from subscribers, Netflix has restricted password-sharing and continues to raise subscription fees. Netflix also adopted ad-supported SVOD service after avoiding it for years.

While Netflix’s subscription revenue continues to grow, the rate is not as fast as the rest of the streaming industry. Between 2020 and 2025, Netflix’s share of total domestic streaming subscription revenue is projected to decline from 32.4% to 21.3%. This has happened as YouTube ($10.13 billion) and Paramount+ ($3.06 billion) expanded their share of subscription revenue, and Peacock and Apple TV+ found larger audiences.

EMarketer’s report does not include Prime Video, since Amazon does not separate the streaming platform’s revenue from the Prime membership revenue. Despite this, the report suggests Prime Video plays an outsized role in the U.S. streaming market. Indeed, the forecast contends that U.S. adults will watch Prime Video for an average of 12 minutes per day in 2024, which is almost 33% of the time people will spend watching Netflix.

In January, Amazon turned advertising on by default for Prime Video users. To avoid ads, Prime Video subs can pay an additional $3 per month. This tactic could generate $1.8 billion of subscription revenue for Prime Video this year, according to Bank of America.

Earlier this year, Amazon acquired a stake in the bankrupt Diamond Sports, a regional sports network company. This allowed Amazon to obtain the local broadcasting rights for several professional sports teams.

“Pricing details haven’t been announced, but it’s feasible that Amazon could increase its video subscription revenue by charging a monthly fee to access the games of specific teams,” read the report. Media Play News