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Streaming Video No Longer an Existential Threat to Linear or Pay-TV, Says Omdia Analyst: ‘Perversely, Advertising Keeps Creeping Into TV’

  2024-03-10 varietyNaman Ramachandran38220
Introduction

The direct-to-consumer SVOD model which is undergoing uncertain times was the subject of a presentation by Tony Gunnarss

Streaming Video No Lo<i></i>nger an Existential Threat to Linear or Pay-TV, Says Omdia Analyst: ‘Perversely, Advertising Keeps Creeping Into TV’

The direct-to-consumer SVOD model which is undergoing uncertain times was the subject of a presentation by Tony Gunnarsson, senior principal analyst, OTT video, media and entertainment at Omdia. Gunnarsson was speaking at Singapore’s Asia TV Forum and Market.

The number of pay-TV subscribers remains above one billion and is likely to remain so for the foreseeable future. With revenues of $195 billion, pay-TV remains the largest revenue sector by far, Gunnarson said, driving more than half of the global TV and video market. The key takeaway from the presentation was that despite innovation, streaming remains unable to fully replace pay-TV .

“SVOD has proven to be a great vehicle for unbundled access to TV and movies, but the low ARPU [average revenue per user] nature of the SVOD model is increasingly being seen as flawed,” Gunnarsson said. Therefore, SVOD is, and will remain, a companion piece to linear TV, the presentation said. The crucial factors here are that premium sports remain out of reach for SVOD providers, while broadcasters are key for linear programming like news. Rather than as a source of disruption, SVOD is now best seen as coexisting with linear TV, said the presentation.

The presentation also said that permanent fragmentation of TV and video has arrived. “Of course, we’ve seen the number of options for TV and video for customers greatly increase over the last decade. But even so, linear TV is not going away,” Gunnarson said. “Players that can combine linear TV, SVOD and AVOD are likely to succeed.”

The growth in the SVOD market will come from being bundled with or by telcos, the presentation said. “We could have created a platform where all the big streaming services existed, but we had to enable the telcos to do that for us. It’s quite clear why that is happening. The big next generation direct-to-consumer streaming services that depend on access to audiences of scale that can only be reached through telco and pay TV partnerships,” Gunnarson said.

Advertising will be the main driver for the direct-to-consumer sector, the presentation said. “There are a range of perverse ways that advertising creeps into TV and video that we thought just a few years ago wouldn’t happen,” Gunnarson said.

(By/Naman Ramachandran)
 
 
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