The latest estimates from Ampere Analysis suggest that there is room for three billion additional streaming subscriptions across the world’s largest media markets, even though some territories are moving towards a ‘stacking ceiling’. As SVoD growth becomes increasingly driven by consumers stacking subscriptions on top of one another, how many services will the average household ultimately take?
Looking at 20 of the largest TV subscription markets worldwide to establish the theoretical ceiling for SVoD stacking behaviour, Ampere thinks that that this maximum ceiling for SVoD services per household is highest in the US, at around eight. In Europe, is between two to five services per household, while in developing markets like Brazil it is far lower – at just 1.5.
Interestingly, sespite cord-cutting, the average US household has continued to spend an almost identical amount on TV services every year ($900) as they switch from individual high cost cable and satellite contracts to multiple lower-price SVoD services.
“This stability in expenditure, mirrored in many other markets worldwide, leads us to conclude that the fundamental determinant of stacking behaviour will be household entertainment budgets, and this allows calculation of a theoretical ceiling for SVoD uptake,” says Daniel Gadher, Research Manager at Ampere Analysis.
“Even as we begin to see growth in SVoD services in emerging markets, our analysis shows that opportunity for expansion is actually still a very solid proposition in established territories,” Gadher says.
Various factors will limit how close individual markets will get to this ceiling, with sports key issue. Consumers who want to watch sport will have to continue subscribing to payTV services, which reduces the available budget for SVoD. In the US for example, factoring in sports spend, the capacity for SVoD services drops from eight per average household to between four and five.
After accounting for factors such as sport and future growth in spending, markets such as the UK and Germany have an average household capacity of roughly three services at current price points. CSI Magazine