Futuresource: steady growth masks ‘seismic’ shifts in US video and TV market
Details
Joseph O'Halloran
| 22 January 2019

As the smart home begins to gain traction and starts to reshape the way that people consume and discover new content, the entertainment landscape could begin to fragment further says new research from Futuresource Consulting.

The analyst believes that its work has unearthed some seismic shifts in the US entertainment space regarding how people might consume premium content in the future and its latest research, The Battle for The Living Room, aims to puts into context some of these major shifts in the content and hardware industries and how they are shaping and re-aligning in-home user relationships.

Futuresource estimates that the US video and TV industry saw a 1% rise in consumer spend in 2018, taking the market up to $133 billion, equivalent to 53% of the global total, with modest annual increases expected for the future, reaching $136 billion by 2022.

At the vanguard of growth is the SVOD market and the analyst calculates that approximately 30% growth for the sixth consecutive year, as established services continue to capture consumer attention through strong programming investment and aggressive promotions. Futuresource believes that the continued growth means that SVOD consumer spend on in 2018 exceeded that of total transactional video (sell-through & rental) for the first time.

The analyst also forecasts that pay-TV revenues are likely to have declined by 2% in 2018, down to $97 billion and that this will slow to an average decline of 1% per year for the forecast period, as consumers shift an increasing proportion of their spend towards alternative SVOD services. That said, Futuresource stressed that pay-TV will continue to play a significant role, still accounting for over two-thirds of total entertainment spend in 2022.

“There’s no doubt that 2018 was a significant year for the US video and TV industries,” commented Futuresource Consulting principal consultant David Sidebottom.

“The entertainment landscape was redefined with companies changing their strategies and undergoing some major M&A activity. Disney’s proposed acquisition of Fox and confirmation of its direct-to-consumer service, Disney+, along with the completion of AT&T’s acquisition of Time Warner, were key moments in a turbulent twelve months. Internationally, Comcast’s acquisition of Sky brings two like-minded companies together, both considered to have best-in-class pay-TV service offerings. It also provides Comcast with wider geographical reach and entry into key European markets. Such acquisitions and collaboration will help redefine customer relationships and play a pivotal role in the battle for the living room, but the dust isn’t going to settle any time soon.”