DTVE Data Weekly: How operator bundling of SVOD is changing the direct-to-consumer business

Up until relatively recently, the indirect wholesale segment of SVOD – meaning services bundled via operators in mobile, broadband or TV packages – had failed to make a dent in the largely global direct-to-consumer business.

For most of the 2010s, wholesale SVOD subscriptions made up less than 10% of the total global market for online video subscriptions. Through the 2010s, SVOD grew from a small niche to a global phenomenon, built on contract-free and online direct-to-consumer relations. Toward the end of the decade, across many mature markets SVOD would overtake pay TV as the leading source for TV and video.

However, the number of pacts between streamers and telcos and pay TV distributors has steadily increased over recent years: as of 1Q23 there are more than 1,200 live partnerships worldwide. As the number of bundling partnerships has steadily grown, the quality of the bundles themselves have also greatly improved, resulting in more attractive offers to customers. This presents a much more nuanced outlook for the future of SVOD, where a growing proportion will be driven by operator bundling and carrier billing.

SVOD growth and bundling

By the end of 2023, 330 million SVOD subscriptions, or 20% of the global SVOD market by subscriptions, will be via operator bundles.

Come 2028, this number is expected to have grown to nearly 530 million subscriptions, reflecting 25% of the global market.

Our latest analysis suggests that the direct-to-consumer model is now starting to show signs of giving way to the more age-old distribution models reminiscent of traditional pay TV distribution: indirect subscriptions are set to slowly grow in proportion to direct retail, or direct-to-consumer (D2C), subscriptions.

In some key mature markets, D2C subscriptions will eventually decline in proportion as more and more customers fall back on operator bundles for TV and video. In some of the most mature online video markets, the future is set for a return to wholesale distribution of TV and video.

Tony Gunnarsson is Principal Analyst, TV, Video & Advertising at Omdia.

Omdia has completed a major piece of new market analysis looking at the distribution channels of online video subscription services. The Online Video Tracker: Indirect Wholesale SVOD Subscriptions Via Operator Bundling, 2014–28 includes market data analysis and forecasts for 74 markets and 13 world regions, from 2014 through 2028.