Subscription video on demand (SVoD) is projected to pull even with broadcast TV globally in hours viewing per day by 2023, according to a new report from Rethink Technology Research, with Netflix getting a big chunk of that influx.
Rethink projects that the current 478 million SVoD subs will grow to 743 million by 2023, with North America driving the largest volume of subscription dollars, going from 146.5 million subs to over 236 million by that date. It says that will accelerate the "drift" of traditional TV advertising to the internet.
That is based on an assumption that each year SVoD service subs will watch a half-hour more per day annually. It predicts (see graph) that current broadcast TV hours watched in 2018 in the U.S. is about five billion per day and SVoD is about a billion per day, with the two lines meeting at about three billion each per day in 2013.
Netflix is predicted to claim over a quarter of SVoD subs worldwide by then (194 million or 26%), but decrease its share of the U.S. SVoD market from 44% to 31% as more over-the-top services grab some of those eyeballs. Up-and-comers include WarnerMedia under AT&T's "freemium strategy," says Rethink, while it predicts Disney will deliver on multiple SVoD services.
Netflix has taken an hour per day away from traditional TV in the U.S., says Rethink, and if that trend continues, and Amazon and Hulu and others each take an hour, then a half-hour more each year, over half of advertising viewing on TV disappears.
"Each SVoD manages to get more viewing time per home, every quarter," says Rethink in explaining its prediction. "If you simply assume that each SVoD subscription begins taking one hour per day, and then a year later takes 1.5 hours, all the way up to 3 hours a day, you get this (above) graph. The forecast numbers we have done for the SVoDs are all new, but they are consistent with other research firms."
Rethink based the report on a list of active SVODs, then "establishing pricing points for service, and subscribers numbers from public reports, executive addresses and press materials and where possible by speaking to SVoD players.