Omdia: Online video on the cusp of a new stage of market evolution

LONDON, Oct. 31, 2023 /PRNewswire/ — Following a decade of cord-cutting, that has seen pay-TV subscribers churning to paid online video services, Omdia expects 2024 to bring a new stage of market evolution, with users of paid online video services moving to free online video.

Omdia is tracking several market developments that are driving this pay-to-free (P2F) trend. The clampdown on password sharing by streamers, for example, has created a welcome subscription boost for them. But Omdia sees this as a short-term phenomenon, with that segment of the streaming customer base vulnerable to P2F churn in 2024, particularly as industry strikes and the cutting back on programming budgets will start to affect content quality.

The ongoing cost-of-living crisis will also lead to some pressure towards P2F churn. This is something that will become even more apparent as the streamers increase their prices to improve profitability while, at the same time, the attractiveness of free (Advertising Video on Demand/Free Ad Supported TV) alternatives grows.

And, while Omdia encourages streaming services to offer advertising options to maximize revenue, this step needs to be implemented as non-intrusively as possible, so the viewing experience is not significantly impacted by too many advertisements.

Maria Rua Aguete, Senior Research Director, in Omdia’s Media and Entertainment practice, said: “We are expecting that streaming companies will manage ad loads in a sensible way, and so Omdia is still forecasting good growth for paid online video in 2024. The movement from free to pay will happen, although there will still be room for the paid services to continue to thrive. But all of the factors we have highlighted mean that the balance is quite precarious, and the poor implementation of advertising, or the imposition of price increases too quickly and too steeply, could well threaten that expected growth.”

Exclusive insights from Omdia’s research will be shared at the Media & Entertainment Leaders Summit taking place on November 7, 2023, in London. As well as global television and media executives, Omdia’s industry leading expert analysts will be delving into the factors influencing the global media and entertainment industry. Register here for your place.

ABOUT OMDIA:

Omdia, part of Informa Tech, is a technology research and advisory group. Our deep knowledge of tech markets combined with our actionable insights empower organizations to make smart growth decisions.

Fasiha Khan [email protected]

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SOURCE Omdia