Consumer Video Spending To Remain Flat As OTT Rises, Traditional Media Declines: Analyst

Although all new digital video OTT spending continues to climb, one industry estimate for overall consumer spending on all video (including traditional pay TV and theatrical box office) projects it will decline slightly due to COVID-19 initially, and level off in the coming years.

MoffettNathanson Research says total U.S. consumer spending on video will stabilize over the next five years, down 0.4% to $138 billion in 2024 from $141 billion in 2019. 

By way of comparison, video spending climbed to $141 billion in 2019, from $128 billion in 2014.

“Given technological shifts offering consumers greater value through streaming options, U.S. video spending has been in a deflationary environment since 2017,”  write Michael Nathanson and Craig Moffett, senior research analysts. “We believe that this deflationary period is a historic first.” 



Total OTT business (subscription streaming, virtual multichannel video programming distributors, vMVPDs) is now estimated to climb 18% higher to $51 billion by 2024, with traditional video down 6% to $88 billion in that year.

Subscription streaming is projected to grow 19% to $38 billion in five years, from $16 billion (2019), while vMVPDs will be up 17% to $13 billion from $6 billion.

Sinking video businesses include traditional pay TV revenues (cable, satellite and telco-based services) dropping 5% to $76 billion in 2024 from $99 billion in 2019); theatrical box office, down 3% to $8 billion (from $11 billion in 2019); and home video, losing 6% to $4 billion from $9 billion.

MoffettNathanson says these changes come while looking at historical technological media change during recent years "combined with periods of economic weakness, further accelerating shifts in media spending."

As evidence of this it points to massive changes recorded music revenues, print advertising, and radio advertising, and DVD spending.

Next story loading loading..