By Joe Tan
Five major US-based platforms will control 53% of the world’s 1.7 billion SVoD (Subscription Video-on-Demand) subscriptions by 2026, Digital TV Research highlighted in its SVoD Platform Forecasts report. This, according to the report, equates to a collective 901 million subscriptions by 2026 — up from 585 million in 2021.
Furthermore, the report identified Netflix as the one to remain “the largest player”, adding 53 million subscribers, to reach 275 million subscribers by 2026.
Indeed, the media landscape is ever evolving. Having witnessed the widespread adoption of SVoD streaming services in the last decade, giant tech companies like Apple, Amazon and Netflix have now earned a greater foothold in the world of entertainment.
Pioneering the SVoD model was Netflix which started out as a DVD rental business about three decades ago, and is now a giant video streaming and production company. From purchasing content from studios to producing hundreds of its own original titles, Netflix celebrates its 10th year in going global this year, and is now home to 214 million paid subscribers, having added 4.4 million subscribers in Q3 2021.
The spike in the number of subscribers was largely due to the release of Squid Game, which Netflix labelled as its biggest title ever released at launch. The South Korean survival thriller reached 111 million global accounts in its first 17 days on the service, smashing the previous record from Bridgerton which was watched by 82 million households in the first 28 days. The success of Squid Game further affirmed Netflix’s key strategy in expanding its international content, having invested heavily in foreign-language shows and films.
For instance, Netflix hosted the Netflix Festival Japan 2021 last month in an attempt to cater to the appetite for Japanese entertainment both in Japan and globally. The two-day festival has allowed the streaming platform to elaborate its focus in going forward and how it aims to improve the profile of Japanese storytellers.
As Netflix’s Kaata Sakamoto, Vice-President – Content, for Japan, said: “While Anime continues to be fundamental to our growth strategy – we are one of the biggest producers of Anime in the world, watched by over 120 million households worldwide a year – we see a growing appetite for Japanese feature films.
“We now have more than 5 million subscribers in Japan, and the number continues to grow. Our Japanese fans are hungry for homegrown stories.”
Also celebrating its 10th anniversary this year was Amazon Prime Video, the SVoD service from the e-commerce giant. At the announcement of the company’s Q1 2021 financial results earlier this year, Jeff Bezos, Founder and CEO of Amazon, revealed that over 175 million Prime subscribers have streamed shows or movies in the past year, and streaming hours “are up more than 70% year on year”.
Home to original shows and movies like The Boys and The Tomorrow War, Amazon Prime also offers live sports such as the English Premier League football matches in the UK and coverage of the ATP and WTA Tour tennis tournaments.
In May this year, Amazon announced the acquisition of MGM for a purchase price of US$8.45 billion. The latter has nearly a century of film-making history and complements the work of Amazon Studios, which has primarily focused on producing TV show programming. Under the agreement, Amazon will help preserve MGM’s heritage and catalogue of films, and provide viewers with greater access to these existing works.
Mike Hopkins, Senior Vice-President of Prime Video and Amazon Studios, said: “The real financial value behind this deal is the treasure trove of IP in the deep catalogue that we plan to reimagine and develop together with MGM’s talented team.
“It’s very exciting and provides so many opportunities for high-quality storytelling.”
And for Apple, having revolutionised the music industry in the 2000s with iPod and iTunes, the iPhone maker has now hopped on to the SVoD bandwagon in 2019 with the launch of Apple TV+. Besides offering Apple Originals shows and movies in 4K/Ultra HD (UHD) high dynamic range (HDR) quality, the Apple TV+ library also covers award-winning series, compelling dramas, ground-breaking documentaries, kids’ entertainment, comedies, and more, where viewers can just pick up where they left anywhere on Apple devices.
Not letting tech giants take the lead in the SVoD marketplace, traditional media companies like Disney have finally joined the bandwagon in recent years. In particular, Disney introduced its SVoD platform called Disney+ in the US in November 2019, just before the COVID-19 pandemic hit. Despite the challenging pandemic period, the service was rolled out progressively into other countries like Canada, Australia, New Zealand, Europe and Singapore, and hit the 100 million global paid subscriber milestone this March, just 16 months after its launch.
“The enormous success of Disney+, surpassing the 100 million subscriber mark, has inspired us to be even more ambitious, and to significantly increase our investment in the development of high-quality content,” said Bob Chapek, CEO of The Walt Disney Company.
“In fact, we set a target of more than 100 new titles per year, and this includes Disney Animation, Disney Live Action, Marvel, Star Wars, and National Geographic.
“Our direct-to-consumer (D2C) business is the company’s top priority, and our robust pipeline of content will continue to fuel its growth.”
As Disney+ turns two, it accounts for 179 million total subscriptions across Disney’s D2C portfolio, and 60% subscriber growth year-on-year for Disney+. Chapek added: “We continue to manage our D2C business for the long-term, and are confident that our entertainment and expansion into additional markets worldwide will enable us to further grow our streaming platform globally.”
Digital TV Research’s SVoD Platform Forecasts report similarly projected Disney+ to be “the biggest winner”, likely to add 140 million subscribers between 2021 and 2026, to take its total to 271 million. Of these, about 102 million of Disney+ subscribers, representing 38% of the total, in 2026 will be in the 13 Asian countries under the Hotstar brand.
Simon Murray, Principal Analyst at Digital TV Research, concluded: “Our previous forecasts based on June 2021 results estimated that Disney+ would overtake Netflix in 2025. However, based on the September 2021 results, we now expect that this will happen in 2027.
“Disney+ only started in six new countries during 2021. Delayed from 2021, the launches in Eastern Europe will take place in 2022. This is likely to push back the remaining Asian launches to 2023.”
Indeed, the SVoD landscape has become a major marketplace for the world’s tech giants and media outfits.
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