Please wait...
Please wait...

Streaming revenue to overtake pay TV in US this year, reveals Ampere

Revenue from streaming platforms in the US will overtake revenue from pay TV this year, according to London-based research outfit Ampere Analysis.

Ampere found that total revenue from streaming, including ads from hybrid streaming subscription tiers, will overtake revenue from pay TV subscriptions in the US for the first time in the third quarter of 2024.

Looking to the next four years, the value of pay TV in 2028 is expected to fall to half the value it saw at its peak in 2017.

Ampere noted that while streaming subs overtook pay TV subscriptions in the US in 2016, streaming’s lower average revenue per user, which currently sits at around one-tenth that of pay TV, means revenue is only catching up now.

Additionally, a slowdown in the growth of subscriber numbers in markets such as the US and UK has driven a shift in focus from the streamers towards revenue growth and, eventually, profitability.

As a result, Ampere points out that the introduction of cheaper ad tiers has been successful not only in increasing new subscriber growth in previously saturated markets, but also in acting as an additional revenue source for streaming services.

Revenue from ad tiers will pass US$9bn in the US this year, which Ampere says is bolstered by the launch this quarter of Amazon Prime Video’s new ad tier.

Rory Gooderick, senior analyst at Ampere Analysis, said: “Most major streaming services in the US have launched their hybrid advertising tiers, which, along with increasing clampdowns on password sharing, have been successful at reigniting growth in the streaming market.

“There is still a way forward for pay TV, however. Disney and Charter’s recent deal in the US, which gave almost 15 million Charter subscribers access to Disney+’s advertising tier, shows how the two businesses can work together to maximise streaming’s reach to domestic subscribers and highlights the importance of traditional distribution platforms as service aggregators.

“Longer-term contracts and the reduction in churn makes this an attractive proposition for streamers, while control over the billing relationship also means there’s something in it for the pay TV provider too.”

Please wait...