Although global streaming revenues are now estimated to grow by double-digit percentages for the year -- 14% for all of 2023 to $65.7 billion -- the rate of increase appears to be slowing, according to Wells Fargo.
There will be a shift in financial focus for streamers, according to Wells Fargo analysis.
“We expect price to be a bigger factor or even overtake sub growth as price hikes continue,” writes Steven Cahall, media analyst for Wells Fargo.
Looking at results in a more granular way -- in the third quarter, for example -- revenues were up 4% sequentially from the second quarter to $16.7 billion.
Sequential revenue growth is now expected to drop to 2% to 4% for the first half of 2024. It was at a 3% to 5% hike in early 2023 -- and down from a 5% to 7% spike in the second quarter 2021.
Netflix commanded 51% of all direct-to-consumer (D2C) streaming revenues in the latest three-month period -- at $8.5 billion.
Disney+ came in second with a 13% share at $2.2 billion, followed by Hulu at 10% with $1.6 billion. Paramount+ was in fourth place at 7% and $1.1 billion, followed with Peacock in fifth place with 5% and $830 million, while Starz remained at a 1% share.
Cahall expects average domestic average revenue per user per month (ARPU) to climb .3% year-over-year to $10.68 in 2023 and at 8.8% higher for all of 2024.
He says this gain will come from not just from regular subscription fee gains but also improvement in “advertising delivery.”
In the third quarter, Netflix had the highest ARPU -- $16.29/month -- of all streamers, followed by Max at $14/month. Hulu was the third-highest at $12.11/month. Of the three, only Netflix made gains (2%) from the second quarter, while Max was flat, and Hulu declined 2%.