Canadian research firm Convergence Research Group expects over-the-top revenue to grow 29% in 2020, with overall streaming service revenue to nearly double by 2022.
While the COVID-19 pandemic has squelched nearly every business sector in the country, streaming video has held its own. In its annual North American Couch Potato report, Convergence estimated that domestic OTT access revenue rose by 35% in 2019 to $22 billion, and is expected to rise another 29% to $28.5 billion in 2020. Fueling the growth is the surge in the number of OTT offerings from direct-to-consumer services like Disney+, Apple TV+, and upcoming offerings from NBC (Peacock) and AT&T (HBO Max). Convergence based its estimates on 77 OTT services (more than 50 providers), led by Netflix, Hulu, and Amazon. The researcher predicts OTT access revenue will increase 55% to $44.2 billion in 2022.
“Our forecasts assume the coronavirus will not be as major a disruptive force beyond 2020,” Convergence wrote in the report.
Convergence sees at least some of that OTT growth coming at the expense of traditional pay TV. The researcher estimated that U.S. pay TV subscribers declined by 6.358 million, more than the 4.034 million lost in 2018. Convergence sees that trend continuing, with 2020 pay TV customer declines expected to be 7.097 million in 2020 and 7.475 million in 2022.
Convergence also estimated that at the end of 2019 45.42 million U.S. households did not have a pay TV subscription, up from 38.22 million in 2018. For 2020, the company estimates 53.35 million won’t have a cable, telco or satellite pay TV subscription, rising to 69.63 million by 2022.