Just How Big Is ‘SVOD’ Set To Be?

By on Nov, 28 2016 with Comments 0

If the acronym ‘SVOD’ is as foreign to you as the lyrics to the current German-language Top 40 hit from Sportfreunde Stiller, you better get to know it if you’re a TV industry C-Suiter.

According to the just-released North America SVOD Forecasts report from London, England-based Digital TV Research, the U.S. and Canada will be home to 112 million SVOD subscribers for movie and TV services only by year’s end.

That’s up by 19 million since 2015, and the SVOD total is forecast to climb to 138 million by 2021.

This is highly significant, because that’s significantly higher than the total number of TV households in North America expected by 2021.

Excluding sports, the average SVOD subscriber in the U.S. will pay for approximately 1.5 services, such as Netflix and Amazon Video.

That puts the number of SVOD subcribers, minus Canada, at 127 million in 2021.

For perspective, the Digital TV Research report expects a total 117 million TV households by 2021 in both the U.S. and Canada.

“It is important to stress that these SVOD figures are gross – some homes take more than one SVOD platform, especially in the U.S.,” said Simon Murray, Principal Analyst at Digital TV Research.

Therefore, by 2021 some 43 million SVOD subscriptions will be “secondary.”

Putting it another way, there will be 84 million primary SVOD users in the U.S. by 2021. That represents 71% of all domestic TV households.

Murray noted that his forecasts include Amazon Video, as opposed to other forecasts that examine SVOD trends.

He said, “Amazon Prime subscribers do not directly pay for Amazon Video. However, to give as full a picture of the sector as possible, we calculate that 60% of Amazon Prime subscribers watch Amazon Video. For these homes, we have devoted half the Amazon Prime fee to Amazon Video.”

Applying this methodology, the number of U.S. Amazon Video subs will surge from 30 million in 2015 to 49 million by 2021.

Amazon Video is expected to start in Canada in 2017.

Factoring in those new subscribers, Amazon Video is expected to have 51 million subscribers in North America by 2021. These subscribers will generate revenues of $2.486 billion.

Meanwhile, Netflix is forecast to see its SVOD subscriber count rise from 53 million in 2016 to 59 million in 2021.

The U.S. will provide 52 million of the 2021 total.

Netflix’s North American SVOD revenues is forecast to increase from $5.358 billion in 2016 to $6.853 billion in 2021.

The study reviewed data and projections for Netflix; Amazon; Hulu; HBO Now; Showtime; Starz Play; Sling TV; and DirecTV Now in the U.S. and Netflix; Amazon; and Bell Media‘s CraveTV.

It did not include data for Shomi, a video-on-demand service Rogers and Shaw launched in November 2014 that will cease operations on Nov. 30. It had anticipated to reach some 900,000 total subscribers by Dec. 1.

About The Author: Adam R Jacobson is a veteran radio industry journalist and advertising industry analyst with general, multicultural and Hispanic market expertise. From 1996 to 2006 he served as an editor at Radio & Records.

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