It's Official: OTT Now Bigger Than Cable
The jury is still out on whether OTT is better than pay TV, but one thing is certain: OTT is now bigger than cable. For the first time ever, global subscriptions to online video services surpassed cable subscriptions in 2018, according to IHS Markit research cited in the Motion Picture Association of America's "2018 THEME Report."
The number of subscriptions to online video services worldwide increased to 613.3 million in 2018, up 131.2 million from 2017. Cable subscriptions fell 2% to 556 million. In the study, households with more than one type of subscription are counted in both categories, and most households have both cable and OTT subscriptions.
Before declaring OTT dominance, keep in mind that cable still brings in more revenue than OTT by far: $118 billion in 2018, compared to just under $10 billion in revenue. Though satellite lags far behind both cable and OTT services in total subscriptions, satellite services brought in nearly $90 billion in revenue in 2018. Even IPTV services are still ahead of OTT, revenue-wise, at just under $30 billion.
The annual report covers both the home and theatrical entertainment markets (THEME stands for "Theatrical and Home Entertainment Market Environment"). Digital and physical disc sales were also up in 2018, rising to $55.7 billion, 16% more than in 2017. Spending on physical media is down 48% since 2014, while digital spending has increased by 170% in the same period, according to IHS Markit and Digital Entertainment Group research cited in the report.
As for cinema, global box office in 2018 was up 1% over 2017 to $41.1 billion. Films from the U.S. and Canada accounted for $11.9 billion, with films from the rest of the world bringing in $29.2 billion. That's a slight drop of 2% for international films. Since 2014, global box office is up 13%
The SVOD market is already crowded. Do new entrants Disney+, Apple TV+, and BritBox have what it takes to give Netflix and Amazon Prime Video a run for their money?