Video Services: State of the Market

The video services space, including pay TV and OTT, continues to evolve to meet ever-changing market conditions and consumer behaviors.

The traditional pay-TV market continues to face significant challenges including ongoing subscriber erosion and competition from vMVPDs. The market has had to pivot to vertical integration and bundling, aggregation, and online video solutions to sustain and grow.

The OTT video services market continues to evolve, with high-profile offerings from large media organizations and smaller-scale offerings from a variety of more niche players. Services continue to augment their user experiences and distribution channels with many employing a hybrid business model approach to better reach and monetize their offerings.

This State of the Market industry report examines the top trends in the US and Canadian video service markets and the forces that will affect the market over the next year. The report includes a five-year forecast of pay-TV and OTT subscriptions in the North American market.

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Bottom Line
  Evolution of Entertainment Media Consumption   
  COVID Impact on Video Consumption   
  Cord Cutting Continues, Impacting Revenues
  The Streaming Service Stack Has Not Yet Hit its Ceiling
  Without Contracts, Service Hoppers Contribute to Churn
  Content and Discovery Challenges Impact the User Experience
  Bundles and Aggregation Platforms Aid in Service Discovery

Assessing the Video Service Market: Strategies by Service Segment 
  Defining the Video Service Market   
  Traditional Pay-TV Providers Move Online   
  vMVPDs Grow Despite High Operating Costs   
  Subscription Video-On-Demand (SVOD): Services Raise Prices   
  Transactional Video on Demand (TVOD) Benefits from Shelter at Home   
  Advertising-based Video-on-Demand Services (AVOD) and (FAST) on the Rise   

Trends Shaping the Streaming Services Market  
  Smart TVs are on Fire   
  Shifts in Windowing Grow TVOD Services   
  Consolidation Driving Competition   
  Content Creators are Going Direct to Consumer (DTC)
  Standard Measurements in Development   
  Hybrid Business Models are a Competitive Advantage  

Profiles of OTT Services with Hybrid Business Models   
ViacomCBS – As of February 2022 -“Paramount”   
Discovery+   
Redbox   
AppleTV+
Peacock  

Market Forecast: US OTT Service Subscriptions and Revenue   
  Forecast Methodology and Assumptions   
  Forecast US OTT Service Subscriptions   
  Revenue Forecast   

Implications and Recommendations   

Glossary of Terms   

Appendix   

Companies Research or Interviewed for Report   

List of Figures

Attribution
   

Penetration of Traditional vs. OTT Video Services 
Evolution of Entertainment Media Consumption   
Pay-TV Adoption in North America Forecast: 2020-2024
Traditional Pay-TV Subscriptions, Cord-Cutters vs. Cord-Nevers
Average Monthly Spending on OTT Services
Number of OTT Service Subscriptions   
OTT Subscriber Churn  
Number of OTT Services Cancelled: Non-Hoppers vs. Hoppers  
OTT Service Use by Business Model   
Top Factors Influencing OTT Service Subscription   
Method of Subscribing to OTT Services
Entertainment Video Service Ecosystem
Pay TV Adoption by Service Type   
vMVPD Service Adoption, 2017-2021
Leading vMVPD Service Providers   
Subscriber Churn: vMVPDs vs All OTT Services   
Top SVOD Services - US Subscribers, Year-End 2021   
Transactional OTT Service Use   
Windowing: Viewers' Preferred Method of Watching New Movies   
Ad-based OTT Video Service Usage   
Use of Ad-based OTT Video Services   
OTT Ad-based Service Use, with other OTT Models   
Ad-Based Services Owned and Operated by SVOD Services   
Viewers Ad-based OTT Preferences: AVOD vs FAST   
Attitudes Towards Advertising among Ad-based OTT Viewers
Adoption of Streaming Video Devices  
Neilsen's The Gauge Viewership Metrics
OTT Service Leaders: Business Model Comparison
OTT Services with Hybrid Business Models: Comparison on Key Metrics
Evolution to Paramount+
Paramount+ US Subscriber Estimates
Discovery+ and HBO Max US Subscriber Estimates
Redbox: Ad-based vs. Transactional Use
Apple TV+ US Subscriber Estimates
Peacock US Subscriber Estimates
OTT Subscription Forecast
Subscription Revenue Forecast

Publish Date: 2Q 2022

Pages: 56


Authored By:
Eric Sorensen - Sr. Contributing Analyst
Paul Erickson - Director of Research

© April 2022 Parks Associates
All rights reserved.  No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher.

Printed in the United States of America. 

Disclaimer
Parks Associates has made every reasonable effort to ensure that all information in this report is correct.  We assume no responsibility for any inadvertent errors.

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