SVOD Will Make Up 70% of Total Home Video Spending by 2021

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Subscription video-on-demand (SVOD) services are making up a larger slice of total home entertainment budgets around the world. According to a forecast from Futuresource Consulting SVOD spending will make up 70 percent of global home video budgets by 2021. The area will grow as households subscribe to multiple services.

Last year, SVOD spending overtook spending on packaged media, such as DVDs. Look for global SVOD spend to rise with a compound annual growth rate (CAGR) of 15 percent from 2017 to 2021. 

The rise of SVOD services has been quick: In 2013, they counted for just 13 percent of total home video spending. By the end of 2017, SVOD services took nearly half of the $42 billion spent worldwide on video.

Pay TV is still a far larger area than SVOD, however. In 2017, the worldwide pay TV market was worth $200 billion compared to the SVOD market at $19 billion. China has the most pay TV customers, with 336 million, however their average household spend on pay TV is under $3 U.S. per month.

The attraction of the pay TV bundle, where consumers save money by getting their pay TV, internet, and phone from the same company, will continue to keep the pay TV market strong. Pay TV also has an advantage in providing premium content and sports, Futuresource notes. The trend now, though, is for consumers to rebuild their TV bundles with only the content they want. Providers are focusing on aggregation and user experience to attract customers.

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