According to the report, the cumulative revenue growth will rise from $109.6bn in 2024 to $226.2bn in 2031.
The global SVOD (Subscription Video on Demand) revenue is projected to grow at an average rate of 13.3% annually over the next eight years, resulting in an additional $116.6bn in net new revenue, according to the latest report by MIDiA Research titled “2024-2031 Global Subscription Video Forecasts.”
The report provides a comprehensive analysis of the SVOD market, highlighting key trends and growth patterns expected over this period. Cumulative revenue is predicted to increase from $109.6bn in 2024 to $226.2bn in 2031. A significant portion of this growth is attributed to price increases targeting price-inelastic older consumers, driven by the adoption of SVOD services by “silver streamers” (consumers aged 55+).
A critical insight from the report is the importance of engaging and retaining younger consumers through ad-supported models, which serve as a gateway for future subscription upgrades as these viewers’ financial situations improve. This strategy is vital for sustaining long-term market growth.
The SVOD market is expected to see revenue growth that significantly outpaces the increase in subscriber accounts, indicating a transition towards a more mature and sustainable market model. The cumulative revenue growth over the forecast period is projected to be double that of unique account growth, reflecting increased efficiency in monetisation within the sector.
Engaging younger, cash-poor consumers is crucial for future subscription growth. Ad-supported models are identified as the optimal strategy to attract these consumers initially, with the potential to upgrade them to paid subscriptions as their discretionary spending increases.
Tim Mulligan, lead video analyst and co-founder of MIDiA Research, highlighted: “Perhaps the biggest finding from this report is just how well the unsung heroes of the streaming TV landscape are forecast to perform, with Apple, Comcast, and Paramount all outperforming on a revenue basis. Troubled Paramount is forecast to beat the industry average revenue growth rate by nearly two times. Paramount has three distinct monetisation advantages — global scale, highly engaged users, and a renowned IP bank — all of which make the distribution-agnostic but marketing-keen Paramount able to position Paramount+ as a must-have additional video service. The intense M&A activity around Paramount can now be seen in a different light as a battle to secure premium IP and engagement tools in an industry heading towards subscriber retention.”
Ben Woods, video analyst at MIDiA Research, noted: “With the focus sharpening on profitability, TV streaming services were right to broaden their revenue mix with ad-supported tiers that helped ease the pressure on subscriber growth. Yet, simply widening the funnel in this way may not be enough to engage the entertainment spenders of the future.
“Younger entertainment consumers are facing unprecedented pressure on their already low spending power. Millennials and Gen Z have also been educated by social media platforms to expect a range of free content supported by advertising or brand partnerships. SVOD services risk losing engagement to social video platforms if they fail to create offers that truly cater to younger viewers. Widening the funnel even further through free-ad supported streaming TV channels that do not require a subscription would give SVOD services a better chance of turning these cash-poor consumers into tomorrow’s subscribers.”
Mark Qi, forecasting and modelling analyst for MIDiA Research, added: “As streaming video consumer penetration reaches its saturation point in developed markets, there are companies which will be able to leverage synergy in their wider customer base to bolster subscription numbers. Apple One and cable bundles such as Xfinity and Sky will lead to stronger than average subscriber growth for Apple and Comcast, which in turn bolsters revenue from high ARPU markets.”