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Omdia: SVODs must brace for slower 2021

SVOD services must brace themselves for much slower growth in 2021 after their record-breaking year in 2020, while TV spending on live sports will bounce back and there will be an increased drive among OTT providers to forge partnerships with distributors.

These are a few of the media trends to watch for in 2021 to be identified by Omdia senior research director, TV, online and advertising, Maria Rua Aguete at the NATPE Miami virtual conference at 19:30 GMT on Wednesday January 20.

According to Omdia stats, while global OTT TV subscriptions rose from 849 million in 2019 to 1.064 billion last year, overtaking global pay TV numbers, growth is likely to be relatively slower this year, with the overall number rising to 1.146 billion. Traditional pay TV is likely to remain more or less flat meanwhile.

For Netflix and Amazon, 2021 will be their smallest year of growth in absolute terms since 2015, according to Rua Aguete, while Apple TV is likely to lose close to eight million subscribers as bundling deals expire and the service’s relative lack of original titles makes its impact felt. Catalogue size, says Omdia, is the key determinant of whether subscribers stay with a streaming service or churn.

While SVOD players were big winners from the COVID-19 pandemic, the cinema business was a big loser. According to Omdia, the industry lost US$23 billion in revenue as a result of the pandemic, with innovations such as premium VOD windows and other transactional revenues failed to make up the difference from lost ticket sales.

Omdia also predicts that TV spending on live sports will bounce back this year after a decline of spending on live rights across the major US and EU markets to the tune of US$668 million last year. However, the analyst house says that there are concerns about how far spending can be maintained as new deals are struck amid concerns about budgets and the overall economic outlook.

The analyst house predicts that cinema revenue will recover only partially this year, rising to between US425-27 billion, still over a third down on pre-pandemic levels.

Tags: OMDIA