A new report from Strategy Analytics suggests that for the first time ever, U.S. consumers will spend more on streaming video services than they will on traditional pay TV in the year 2024. While that will be the case, it’s important to note that it’s not because streaming options run at a higher price tag. On the contrary, pay TV still pulls in much higher monthly revenues from its subscriber base than streaming services. Pay TV customers are dwindling while more and more are choosing to cut the cord and opt for more affordable and convenient SVOD options.
According to the report titled U.S. Subscription TV Forecast, consumers spent 8% less on pay TV services last year for a total of $90.7B while spending on streaming services increased by 34% reaching $39.5B in 2020. In 2023, Pay TV spending is expected to drop to $74.5B and SVOD revenue will grow to $76.3B, passing pay TV for the first time ever.
“The revenue picture gives the best illustration of the relative strength of new and old businesses,” says Michael Goodman, Director, TV & Media Strategies. “The fact that viewers are willing to divert an ever-increasing share of their entertainment wallet away from pay TV and towards new internet-based services demonstrates that the future lies with streaming video services rather than legacy pay TV players. This is a long-term transition, but there is no doubt that the writing is on the wall for pay TV as we have known it for more than 40 years.”
According to a recent survey, 82% of Americans subscribe to a paid video streaming service, with 4 being the average number of video streaming services they’re subscribed to. Only 67% of Americans have a pay-TV subscription and fewer use an ad-supported streaming service at 55%.