subscription vod peaks, as covid 19 lockdown drives sales · 2020-05-18 · those with netflix...

Subscription VoD peaks, as Covid-19 lockdown drives sales

Companies mentioned in this report: AT&T, HBO, Comcast, Sky, Disney, Hotstar, Netflix, Amazon.

Lead analyst: Alex Davies

R E T H I N K T E C H N O L O G Y R E S E A R C H

https://rethinkresearch.biz

RETHINK TV: THE RESEARCH ARM OF FAULTLINE

“R e t h i n k h a s a c o m mi t m e n t t o f o r e c a s t i n g m a r k e t s t h a t o t h e r s s h y aw a y f r o m – t h o s e o n t h e v e r g e o f r a d i c a l t r a n s f o r m a t i o n ”

Disney mounts chase for Netflix, as subs spike

SVoD FORECAST TO 2025

Executive Summary

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Copyright © 2020 Rethink Research, All rights reserved.

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CONTENTS

Page

Contents 2

Graphs 3

Snapshot 5

Executive Summary 5

World View 9

Companies View 11

AT&T 12

Comcast 14

Disney 16

Netflix 21

Amazon 24

Companies Compared 27

Methodology 30

Rethink TV: Forecasting disruption in video 31

Contacts 32

About Rethink Technology Research 33


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GRAPHS AND TABLES

Page

Total Subscribers – By Region 9

Total Subscribers – Regional Share 2018 10

Total Subscribers – Regional Share 2025 10

Total Revenue ($) – By Region 10

Total Revenue ($) – Regional Share 2018 11

Total Revenue ($) – Regional Share 2025 11

AT&T Total Subscribers 12

AT&T Total Subscribers – By Region 13

AT&T Total Revenue ($) – By Region 13

Comcast-Sky Total Subscribers 14

Comcast-Sky Total Revenue ($) – Regional Share 2018 15

Comcast-Sky Total Revenue ($) – Regional Share 2025 15

Comcast-Sky Total Revenue ($) 15

Disney Total Subscribers 16

Disney Total Subscribers – Product Share 2018 17

Disney Total Subscribers – Product Share 2025 17

Disney+ Subscribers – By Region 18

Disney Total Subscribers – By Region 18

Disney Total Subscribers – Regional Share 2020 19

Disney Total Subscribers – Regional Share 2025 19

Disney Revenue – By Region 20

Disney Revenue – Regional Share 2020 20

Disney Revenue – Regional Share 2025 20

Netflix Total Subscribers 21


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GRAPHS AND TABLES

Netflix Total Subscribers – Regional Share 2018 22

Netflix Total Subscribers – Regional Share 2025 22

Netflix Total Revenue 22

Netflix Total Revenue – Regional Share 2018 23

Netflix Total Revenue – Regional Share 2025 23

Amazon Prime Video Viewers 24

Amazon Prime Video Viewers – Regional Share 2018 25

Amazon Prime Video Viewers – Regional Share 2025 25

Amazon Prime Video Revenue 25

Amazon Prime Video Revenue – Regional Share 2018 26

Amazon Prime Video Revenue – Regional Share 2025 26

Total Subscribers – By Company 27

Total Subscribers – Market Share 2018 28

Total Subscribers – Market Share 2025 28

Total Revenue – By Company 29

Total Revenue – Market Share 2018 29

Total Revenue – Market Share 2025 29


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• Total market worth $XX.X billion in 2025.

• Total subscribers reaches XXX.X million in 2025.

• COVID-19 lockdowns provide immediate X.X% growth in subscrib-

ers, X.X% lift for revenue—felt for duration of period.

• Netflix retains first place, on XXX.X million subs in 2025—worth

$XX.X billion in revenues.

• Disney passes Amazon in 2020, reaches XXX.X million—worth $XX.X

billion in revenue.

• Disney+ on track to finish 2020 on XX.X million combined subscrib-

ers.

• Amazon hits XXX.X million subs, worth some $XX.X billion.

Disney’s arrival on the global streaming stage could not have come at a

more opportune time, and Disney+ will drive the firm to some XXX mil-

lion subscribers by 2025 – second only to Netflix. For the current king of

SVoD, this encroachment will lead to its first stall in North America, alt-

hough global growth more than makes up for it. With Amazon’s project-

ed uptick, the collective streaming providers are the nail in the coffin for

traditional pay TV approaches, and it is hard to see how viewers with

two or more SVoD services can ever return to the conventional pay TV

model.

The three streaming providers have had the biggest opportunity to rip

market share from the pay TV market handed to them on a plate, and

their projected success here means that they will fundamentally alter the

viewing habits of hundreds of millions of households. Amazon should

be able to convert millions of Prime subscribers into habitual Prime Vid-

eo viewers, although needs to ensure its apps are available on enough

Executive Summary

Snapshot


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TVs and set tops, and ensure its user-experience is up to scratch.

Similarly, Disney will have to ensure that Disney+ has enough content

to keep its subscribers coming back. It will have to follow Netflix’s ex-

ample, in fleshing out the libraries, and Amazon has made similar

moves to improve its own regional catalogs. Soon, Disney’s Hulu and

ESPN operations will pale in comparison to its flagship service, but as it

stands, Disney+ looks like the SVoD service that has the shortest shelf-

life of the three. This slight is made up for by its price, however, and it

is a problem that can be readily fixed – if Disney can get its content at

the right price. Still, churn is going to be turbulent.

Our forecast projects that Netflix will reach XXX.X million subscribers

in 2025, taking first place, with an estimated $XX.X billion in revenue.

Disney’s total subscribers are expected to reach XXX.X million, account-

ing for some $XX.X billion. Ama-

zon’s Prime Video viewers are on

track to reach XXX.X million in

2025, which equates to around

$XX.X billion in revenue, depend-

ing on how you slice the total Prime

subscription value. AT&T’s HBO

Now is also a new arrival, and we

expect the firm to net XX.X million

global subscribers, with revenue of

$X.X billion. Comcast is the fifth

company tracked in this forecast,

and we expect its SVoD services to

reach XX.X million subscribers in

2025, with revenue of around $X.X billion.

Combined, this is a market that reaches XXX.X million global subscrib-

ers, worth $XX.X billion in 2025. That growth comes at the expense of

traditional pay TV services, and the uplift expected from the COVID-19

lockdowns will have long-lasting affects. Once kids are locked into an

SVoD library, and Disney’s does look particularly enticing, parents are

going to be quite reluctant to cancel that service, and when the prices

are this low, the SVoD services become very sticky offerings. When

measured against our historic projections, we believe that the lock-

downs will result in an 8.7% increase in subscriptions, and a 7.9% in-

crease in revenue, in 2020.


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This is still a complex market, and competition between the three lead-

ing firms is going to be fierce towards the end of the period. The suc-

cess of Netflix and Amazon in developed markets mean that there is

considerable overlap between the customer bases. Those with Netflix

likely have access to an Amazon Prime account. But while Amazon has

struggled to convert Prime subscribers into habitual Prime Video

viewers, the COVID-19 pandemic has provided an opportunity to ex-

plore all the free content available to a viewer.

This might mean that a bored Netflix customer starts poking around

the Prime Video app, and moves their viewing hours across – logging

in on the same device, watching ‘new’ titles, and possibly even pur-

chasing movies or series through the at-times annoying UI. But there

will be plenty of other Netflix subscribers that take a punt on Disney+,

thanks to the low monthly prices and strong flagship titles. In reverse,

a Prime subscriber that does not have a Netflix account, for whatever

reason, is also an ideal candidate for Disney+, and because Disney’s

offering does not overlap, it seems most likely to be taken as an auxilia-

ry option – something to entertain the kids, or replace the monthly trip

to the movie theater.

In the background of all this are AT&T and Comcast, which are in the

process of launching their own SVoD offerings. However, both seem

very focused on the US market, and seem set on ensuring that their

own broadband customers are the initial target markets – motivated by

concerns about cord-cutting.

Comcast’s Sky division is enjoying success with its Now TV offerings,

but its Sky X proposition has not yet made it out of Austria. It seems

clear that Sky X could become an OTT option for Sky’s Pay TV offer-

ings, and later absorb the Now TV elements too, but that roadmap is

for Sky-eyes-only, it seems. It is unclear whether Sky is motivated to

consolidate its lineup in this fashion, however.

AT&T seems content to let AT&T TV Now wither on the vine, and will

push customers that cancel towards HBO Max. Similarly, 2020 is the

year that HBO Now customers get switched over to HBO Max, which

means that AT&T will effectively only have the one SVoD offering –

HBO Max. HBO’s international agreements mean that AT&T remains


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focused on the Americas, but will be pushing HBO Max in Europe

‘where HBO already directly operates premium TV or streaming ser-

vices.’ In other countries, it will continue to work with HBO licensing

partners, but HBO Max will make a scattered appearance in Latin

America and APAC, in time.

In terms of regional performance, the uplift from the COVID-19 lock-

downs seems fairly even across the board. As for the afterglow, Ama-

zon enjoys the longest increase in subscribers, which carries over into

revenues, although as we mentioned earlier, Amazon is a bit tricky to

illustrate when it comes to the finances.

As you will see in the following graphs, the lockdowns will create a no-

ticeable bump in subscribers and associated revenue. This will be wel-

come news for AT&T, Comcast, and Disney, given that their theatrical

business is going to be severely impacted by the lockdown restrictions

on movie theater attendance. Early experiments with releasing block-

buster titles into streaming channels have been promising, but the sur-

rounding bickering between cinema distributors, awards bodies, and

the production outlets means that this model is unlikely to be sustaina-

ble in the long run. That ecosystem will look to get back to the conven-

tional sales channels as soon as they can, rather than embracing struc-

tural change.


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Methodology

The data collected for the report was drawn from a series of interviews

with operators, equipment vendors, silicon designers, and device manu-

facturers. It draws on Rethink Technology Research’s deep knowledge

of the markets, as well as Rethink TV’s expertise in the video ecosystem.

Public documents and filings, and private confessions, have been com-

bined with and used to corroborate the forecast.

Rethink TV maintains a demographic model that charts a range of crite-

ria that help us profile countries. This ranges from population projec-

tions, landmass usage and urban population data, household income

and spending, broadband internet and mobile usage, transport infra-

structure and usage, and national productivity and economic data.

In particular, this report made use of older SVoD forecasts from Rethink

TV, charting the growth of the market as new entrants arrived. This

formed the basis, but was updated with new data as it was available,

from filings and interviews. The next step was to project how the

COVID-19 pandemic would affect viewing habits, and then conclude

how increased viewing time would translate into increased SVoD sub-

scriptions. This modifier could then be applied to the updated model,

providing the final model – and the ability to compare pre-coronavirus

with post-coronavirus scenarios.

Gathering data about how increased viewing and web traffic allowed us

to estimate how likely viewers would be to sign up to new services.

They would make use of the services available to them first, before sign-

ing up for new paid memberships, but many will not take any new sub-

scriptions – for a number of reasons. Consequently, an increase in view-

ing time does not linearly translate to an increase in SVoD subscriptions,

and so those have to be adjusted on an individual basis.


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Who should buy this report?

The data contained within this report, and the wealth of additional in-

formation you will find in the Rethink TV and Faultline archives, will en-

rich your understanding of the technologies at play here, and the wider eco-

system in which they exist. Nearly every business can use this understand-

ing to optimize capital and operational expenditures, and win more con-

tracts.

This report should be read by C-Suite individuals, business strategists, mar-

keters, public relations, and operations management, working in and adja-

cent to the online video marketplace. Anyone who transports videos over

networks, serves video to end users, or sells communications services to

businesses and consumers should be a subscriber to Rethink TV. Govern-

ment regulators, lobbying firms, and strategic decision makers should all

study the data contained.

This report includes:

• Numbers you can drop straight into your business case

• An expectation of the scale of the SVoD market through 2025

• A clear understanding of the initial scope of this market, without

hype

A direct eCommerce purchase can be made here or you can contact client

services at [email protected] to be put in touch with one of our

account managers to get more details and a walk through our service offer-

ings.

https://rethinkresearch.biz/reports-category/rethink-tv/

mailto:[email protected]?subject=Rethink%20TV%20Satellite%20Report%20


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Rethink TV: Forecasting disruption in video

Rethink TV is our video research team, producing market forecasts, technol-

ogy white papers and tracking operator-technology vendor relationships in

pay TV, OTT video and have documented the transition of TV services from

the TV set, onto laptops, tablets, phones and smart TVs and other devices.

Our sister publication Faultline Online Reporter has been Rethinking the

ideas behind TV for the past 20 years. We thought it was time we gave you

a reliable source of business forecasts for the underlying technologies which

have made that transition possible.

Rethink TV also tracks the top 100 paid OTT service providers and their

suppliers, providers monthly updates to their key providers whether that is

Adaptive Bit Rate packaging, encoding, DRM, recommendation systems,

analytics or programmatic advertising systems.

It comprises of two parts:

1) 12 forecasts a year, delivered once a month, related to OTT and video

2) 100 up-to-date profiles on the top 100 operators globally.

Here are some sample titles of reports we have produced recently:

• How to survive the Set Top Box endgame

• Virtualization to capture 500 million fixed broadband customers by 2025

• Addressable advertising boom across all regions and platforms

• Globalization lifts TV sports rights past $85 billion future

• Esports on verge of hypergrowth to $5bn plus gambling

• Who benefits as Global DTH revenue set to shed $ billions

• Disney, AT&T, Comcast stumble in the Netflix slipstream

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RETHINK TV ’S MAIN CONTRIBUTORS

Alex Davies - Senior Analyst

[email protected]

+44 (0)117 329 1480

Rafi Cohen - Analyst

[email protected]

+44 (0)117 329 1480

RETHINK LEADERSHIP

Peter White - CEO and Co-founder

[email protected]

+44 (0)117 925 7019

Caroline Gabriel - Research Director

[email protected]

+44 (0)207 450 1230

www.rethinkresearch.biz


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About Rethink Technology Research

Rethink is a thought leader in quadruple play and emerging wireless and

IoT technologies. It offers consulting, advisory services, research papers,

plus three weekly research services; Wireless Watch, a major influence

among wireless operators and equipment makers; Faultline, which tracks

disruption in the video ecosystem, and OTT video. Riot on enterprise dis-

ruption from the combination of AI/IoT and cloud.

Need more information?

Roz Hilton (Business Development Director, Video Technologies)

[email protected]

+ 44 (0)1962 732886


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Published May 2020

subscription vod peaks, as covid 19 lockdown drives sales · 2020-05-18 · those with netflix...

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