Pay TV plus online SVOD (Subscription Video-on-demand) is about to become commonplace
Previously published on January 15, 2014
There is growing evidence that online SVOD (subscription video-on-demand) services are not eroding Pay TV subscriptions and may in fact be complementary to Pay TV in many homes (read story). Now Deloitte, the consulting firm, has predicted that between 1 million and 1.5 million homes in the UK will subscribe to at least two Pay TV services by the middle of 2014. The upper range of that forecast relies on more online service providers launching dongles to bring their streaming video into televisions. Deloitte expects this to be a global phenomenon; it believes that by the end of this year up to 50 million homes worldwide will have two or more separate pay television subscriptions.
Most multi-service households will have two pay providers and most typically this will be a platform-based service (e.g. traditional cable or satellite operator) plus SVOD, the company says. And it is worth noting that the SVOD services could come from the traditional Pay TV operators, not only from Netflix, LOVEFiLM, Maxdome and their like. As we reported in December, Sky Deutschland’s new online SVOD service, Snap, which is available to anyone thanks to a standalone subscription, is a good example of a Pay TV operator equivalent to what we used to call ‘OTT’.
The additional, new subscriptions being paid out in these multi-service homes will add up to about £3 billion ($5 billion) in revenues, Deloitte is forecasting. While most multi-subscription homes will stick to two services, 10% of these homes will take three or more providers. [Editor – Since nobody takes multiple traditional Pay TV subscriptions, this obviously implies all the new ones are online SVOD). Deloitte reckons that the number of homes taking three or more services could rise to 20% of the total multi-subscription home figure by the end of 2015. Factors driving this rise will be better broadband and more rights owners making content available in VOD.
These forecasts are being made by the technology, media and telecommunications (TMT) practice at Deloitte as part of its annual predictions report.