• by Karlene Lukovitz  @KLmarketdaily, March 7, 2023

After years of strong growth, average annual U.S. household spending on video services — streaming services, pay TV and theatrical — will decline by 8% by 2027, according to the latest projections from Ampere Analysis.

Video services spending peaked in 2022 at $1,146 per household — including an 18% lift in streaming spend, to $374 per household. But this year, average household pay-TV investment is projected to drop below $650 for the first time since 2006, and subscription video-on-demand (SVOD) spend will also start to slow due to the economy and the sector’s maturity in the U.S.

“Spend on video has finally hit its limit for U.S. households,” states Maria Dunleavey, senior analyst at Ampere. “By 2027, unless streaming services can sustain significant price inflation, U.S. households will be investing almost 90 dollars less per year on video services. Recent moves from TV groups to focus on hybrid tiers and free ad-supported video services represent one approach to compensating for this downward pressure.”

However, there’s still ample room for growth overseas for U.S.-based streaming operators.

In Western Europe, not only is the pay-TV market more stable, but SVOD spending is still on the upswing—and the combination will result in an 11% increase in average household video services spend in the region by 2027, Ampere estimates.

In fact, Norway’s per-household spend on video will actually overtake the U.S. in 2025, the first Western market to do so. Norwegians are projected to spend more than $50 more on video than U.S. households by 2027, nearly $300 more than the average UK home, and substantially more than households in Germany, France, Italy and Spain.