Juniper Research’s report stated that as subscription services become increasingly prominent, particularly in the US, different models will be needed to combat subscription fatigue. The report estimates that in 2020 there was an average of four SVOD subscriptions per household in the US, but with growth slowing significantly from 2021.
One successful model is the hybrid service, a combination of subscription- and advertising-supported monetisation, such as NBC’s Peacock, and CBS All Access, which offer tiered services that still generate subscription revenue but show advertisements in lower-priced bands in order to keep end user prices down. Juniper Research anticipates that these services will account for $1.4 billion in advertising spend in 2025.
“Thanks to this high level of market saturation, streaming providers need to keep their offerings competitive to retain subscribers”, observed OTT TV & Video Streaming: Evolving Trends, Future Strategies & Market Forecasts 2020-2025 report co-author Nick Hunt. “Hybrid monetisation is one way that VOD providers can keep their offerings low-cost, and therefore less likely to be dropped.”
Looking at another key growing channel, Juniper found that over 70% of streamed video sessions in the next five years will occur on smartphones, thanks to the emergence of social videos on platforms like TikTok. However, these do not yield a high number of advert slots per video watched, meaning that smartphone advertising spend will only grow at an average rate of 2% each year over the forecast period.