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Streaming revenue will overtake pay TV subscription revenue in the U.S. for the first time later in 2024, helped by the addition of ad tiers by various streamers, according to a new forecast.
Total revenues from streaming, including subscription and advertising revenue, will start topping revenue from pay TV subscriptions in the third quarter of 2024, research company Ampere Analysis projects in a new study unveiled on Monday. “Streaming will continue to race ahead as traditional pay TV declines – with the value of pay TV in 2028 expected to fall to half the value it saw at its peak in 2017,” it predicts.
Streaming subscribers overtook pay TV subs in the U.S. in 2016, but “streaming’s lower average revenue per user (ARPU), which currently sits at around a tenth that of pay TV, means that revenue is only now catching up,” Ampere explained.
U.S. pay TV revenue will still be narrowly ahead of streaming revenue in the second quarter at $17.1 billion to $17 billion, followed by a $17.3 billion to $16.7 billion streaming lead in the third quarter, according to the research firm’s projections.
The ad tiers that streamers have added, from Netflix and Amazon Prime to Disney+ and the streaming services of other Hollywood giants, are one driving force of revenue. Streaming advertising revenue will pass the $9 billion mark in the U.S. this year, the Ampere study forecasts. “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,” the firm explained. Revenue will be further “bolstered” by Amazon Prime Video’s new advertising tier launched this quarter, it highlighted.
“Most major streaming services in the U.S. have launched their hybrid advertising tiers, which, along with increasing clampdowns on password sharing, have been successful at reigniting growth in the streaming market,” said Rory Gooderick, senior analyst at Ampere.
Goodrick added, “There is still a way forward for pay TV, however. Disney and Charter’s recent deal in the U.S., which gave almost 15 million Charter subscribers access to Disney+’s advertising tier, shows how the two businesses can work together to maximize 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 make this an attractive proposition for streamers, while control over the billing relationship also means there’s something in it for the pay-TV provider.”
Total revenues from streaming, including subscription and advertising revenue, will start topping revenue from pay TV subscriptions in the third quarter of 2024, research company Ampere Analysis projects in a new study unveiled on Monday. “Streaming will continue to race ahead as traditional pay TV declines – with the value of pay TV in 2028 expected to fall to half the value it saw at its peak in 2017,” it predicts.
Streaming subscribers overtook pay TV subs in the U.S. in 2016, but “streaming’s lower average revenue per user (ARPU), which currently sits at around a tenth that of pay TV, means that revenue is only now catching up,” Ampere explained.
U.S. pay TV revenue will still be narrowly ahead of streaming revenue in the second quarter at $17.1 billion to $17 billion, followed by a $17.3 billion to $16.7 billion streaming lead in the third quarter, according to the research firm’s projections.
The ad tiers that streamers have added, from Netflix and Amazon Prime to Disney+ and the streaming services of other Hollywood giants, are one driving force of revenue. Streaming advertising revenue will pass the $9 billion mark in the U.S. this year, the Ampere study forecasts. “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,” the firm explained. Revenue will be further “bolstered” by Amazon Prime Video’s new advertising tier launched this quarter, it highlighted.
“Most major streaming services in the U.S. have launched their hybrid advertising tiers, which, along with increasing clampdowns on password sharing, have been successful at reigniting growth in the streaming market,” said Rory Gooderick, senior analyst at Ampere.
Goodrick added, “There is still a way forward for pay TV, however. Disney and Charter’s recent deal in the U.S., which gave almost 15 million Charter subscribers access to Disney+’s advertising tier, shows how the two businesses can work together to maximize 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 make this an attractive proposition for streamers, while control over the billing relationship also means there’s something in it for the pay-TV provider.”