Discover more from Dan’s Media & AI Sandwich
The UK SVOD plateau
New data from Barb indicates the proportion of UK households with access to a subscription streaming (SVOD) service has declined for a third consecutive quarter, falling below two-thirds for the first time in two years.
This plateauing marks the end of an incredible run of sustained growth, from 20% in Q1 2015 (the first quarter of available data) to a high of 68.5% in Q1 2022.
The trend is mirrored by the market leaders, Netflix and Amazon Prime Video, who both peaked in Q1 2022 (reaching 60% and 47% of UK households respectively) and are now back where they were 2 years ago (59% and 44%).
Relative late-comer Disney+ has fared better over the last two years, growing from 23% to 25% of UK households, whilst Apple TV+ and NOW have continued trundling along between 6-7% and 7-8%.
Paramount+, included in this survey for the first time, recorded a respectable/more-than-I-would-have-guessed 5.9%.
However, the overall UK SVOD audience pie appears to have stopped growing, at least for now.
This is in no small part because those who were most likely to adopt SVOD have already done so. The low-hanging fruit has all been picked and the third of UK homes not currently accessing SVOD are going to be harder to persuade.
The economic backdrop is also clearly a factor, as SVOD prices rise and consumers review their entertainment spend in the context of their total outgoings and potentially gravitate towards free services.
This is reflected in a very different trend line for broadcaster streaming services over the past few years. Although methodology changes make direct year-on-year comparisons problematic, Ofcom’s Media Nations 2023 report suggests BVOD viewing increased by around a third in just 2 years (from 12 minutes a day in 2020 to 16 minutes a day in 2022).
The US writers and actors strikes are likely to impact content supply for global SVOD services more than UK broadcaster streaming services, which may end up further depressing UK SVOD access numbers.
Whilst too recent to have impacted these figures, Netflix and Disney’s crackdown on password sharing may also soon start impacting UK SVOD penetration (Barb’s question is about access rather than subscription), as a chunk of those currently free riding decide to step off the SVOD train rather than pony up the subscription fee.
Mid to long term, I anticipate UK household SVOD access will start creeping back up again, aided by cheaper ad-supported tiers and - eventually - falling interest rates, although the 10-40% year-on-year growth seen between 2015 and 2022 feels like a thing of the past.
Hopefully the current plateau in UK SVOD access will prompt more people to realise that, regardless of distribution method (which is moving slowly but inexorably from broadcast to IP), the future TV landscape will continue to be a mix of subscription, ad-supported and publicly-funded and a mix of live and on-demand.
It’s high time we moved beyond the reductive ‘new model will crush the old model’ way of thinking about media and technology and focus on what proportion of the market the new model will realistically serve and over what time horizons.
Thanks for reading Dan’s Media Sandwich! Subscribe for free to receive new posts and support my work.