Expect High-Profile "Streaming Casualties" by 2024, PwC Study Warns

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The global market for streaming is projected to grow from $46.4 billion in 2019 to $86.8 billion in 2024.

Global streaming revenue will keeping growing in the coming years, but Netflix's clear dominance may be over, research and accounting firm PricewaterhouseCoopers said in its new report, "Global Entertainment & Media Outlook 2020–2024."

PwC warned that "subscription fatigue" and "peak wallet" will become "increasingly commonly used phrases as the overcrowded market for OTT services forces consumers to decide which, and how many, they want to take."

Noting the current theory that consumers are willing to pay for three to five pay TV and/or streaming services, "there will be a number of high-profile streaming casualties by the end of the forecast period," the PwC report predicted. "Market consolidation will eventually lead to the new bundle, whereupon some stand-alone OTT services will be packaged with other players in a similar way to pay TV now. WarnerMedia, Amazon and Apple are all making a play as new aggregators in this space. Disney is already offering an aggregated bundle combining Disney+, Hulu and ESPN+ for a competitive $12.99 in the U.S."

Over the five-year period, "a number of major, deep-pocketed rivals to Netflix with similar global ambitions" will launch or, in the case of such players as Disney+ and Apple TV+, further roll out competitive services, PwC highlighted. "The days of Netflix’s virtual global monopoly are gone and its dominance is starting to be challenged."

The annual industry forecast noted the launch of Hollywood giants' own streaming services. "The rapid growth the [streaming] video market continues to show is both partly because of, and certainly strategically why, major traditional operators are entering the market with global streaming services," the report argued. "While Netflix and Amazon continue to be the biggest forces in the market, for the first time well-funded rivals with similar global ambitions will mount a challenge."

The global market for streaming will grow "strongly" at a 13.4 percent compound annual rate from $46.4 billion in 2019 to $86.8 billion in 2024, according to the report.

"A symbolic moment will be reached in 2024 when the global over-the-top market will surpass traditional subscription TV revenue in the U.S., which is by some distance the world’s biggest market," PwC forecast. "Global OTT revenue growth remains much stronger than the global TV subscription market, which will fall at a 0.3 percent compound annual rate between 2019 and 2024. As the global OTT market matures, however, the rate of revenue growth will slow across the forecast period. A rate of revenue growth of 21.8 percent in 2019 will reduce to 9.4 percent in 2024."

Streaming VOD revenue, the field on which Netflix and others play, will be worth $75.1 billion by 2024, making for a 14.5 percent compound annual growth rate from the $38.1 billion recorded in 2019, according to PwC. It also sees advertising VOD revenue expanding.

The need to constantly produce or license "top-quality content is hitting fever pitch as competition intensifies and budgets inflate accordingly," PwC highlighted. "In terms of brand-new shows, the main streaming players — Netflix, Amazon, HBO Max, Disney+, Apple TV+ — collectively have almost 800 new scripted TV series due to land in 2020. In 2007, the year that Netflix moved from DVD-by-post into streaming, global spend on TV content was $90 billion. In 2019, that figure hit almost $170 billion, and it will continue to climb through the forecast period."

Content spending is a key "weapon of the streaming wars," the firm said. "As such, inflation for the best shows and talent is rocketing as incumbent services and new arrivals seek to attract subscribers and viewers."