Revenue from over-the-top streaming TV providers like Netflix, Hulu, Amazon Prime Video and HBO Max rose 35% to $29.6 billion in 2020, and could double to nearly $60 billion by 2023, according to Convergence Research Group’s 2021 The Battle for the American Couch Potato report.
At the same time, linear revenue from cable, telco TV and satellite TV dipped 6% to $94.7 billion, according to Convergence, and is expected to fall another 6.5% in 2021 and by 10% in 2023. Driving that decline is the continued erosion of traditional pay TV subscribers. Convergence estimated traditional TV lost about 6.49 million subscribers in 2020, and will shed 7.35 million in 2021. The research company estimates that in 2023, those pay TV outlets will lose another 7.76 million customers.
Convergence based its analysis on 80 OTT providers, including Netflix, Hulu, Amazon Prime Video and HBO Max. The research company said it expects the average number of OTT subscriptions per household, currently at three, will grow to five by 2023. That coincides with Convergence’s prediction that the number of homes without a cable, satellite or telco TV subscription will grow from 42% in 2020 to 60% by 2023.
“Pressure on programmers and TV access providers to keep up spending in order not to lose programming primacy shows no signs of abating,” Convergence said in the report. “Major programmers face a complicated trajectory, not only in terms of competition but balancing their linear & OTT programming, advertising, theatrical distribution, as well as DTC OTT businesses. Though in decline, traditional US TV access, advertising, programming is still a $220 billion business.”
