Over-the-top (OTT) services and Virtual Service Providers (VSPs) may not be set for an immediate takeover of the video space, but they are expected to continue gaining ground on multichannel services into the next decade.
To be clear, multichannel services are poised to hold on to their dominant position through a five year outlook, S&P Global Market Intelligence’s Kagan group says in a new report. But the firm indicates streaming and online services are on pace to account for 25 percent of all non-multichannel U.S. households this year. That number is expected to rise to one third of non-multichannel households by 2021, Kagan notes.
“Changing viewing habits point to mounting losses for traditional video services, and challengers are lining up to capitalize,” Ian Olgeirson, S&P Global Market Intelligence research director, observes. “However, the operators are not without significant fortifications enabling expectations for preserving a majority share in the five-year outlook.”
Through 2021, Kagan forecasts the number of households that use only self-aggregated over-the-top content services will hit almost 18 million, or roughly 14 percent of occupied households, while virtual services like SlingTB and Playstation Vue will make their way into 11 million households. By contrast, traditional multichannel services are expected to hold on to 82.3 million subscribers, despite a five-year drop of 10.8 million households, the firm says.
The report comes on the heels of a similar study from Strategy Analytics that found PayTV providers are expected to continue to pull in the lion’s share of consumer spending through the start of the next decade, despite the rise of over-the-top video services. More on that here.
