The OTT streaming industry may not be so excited and enthusiastic as people return to normal activities outside the home with COVID-19 vaccines and easing of restrictions. Fueled by hundreds of millions of people at home, streaming video was one of the big winners of the COVID-19 pandemic, with subscription service usage surging.
The global OTT streaming market is expected to grow from $121.11 billion in 2020 to $141.17 billion in 2021 at a compound annual growth rate (CAGR) of 16.6%. The growth, according to The Business Research Company’s “OTT Streaming Global Market Report”, is mainly due to companies resuming their operations and adapting to the new normal while recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach $257.37 billion in 2025 at a CAGR of 16%.
However, analysts believe the “streaming wars” really begin now. With return to normal, media and technology companies need to show investors they can grow streaming subscribers when “everyone isn’t stuck inside”. A simple way to gauge which companies are doing well and which aren’t, is to look at total number of subscribers and average revenue per user (ARPU). However, not every company reveals those numbers. If a company chooses to obfuscate them, there is probably a reason. Clarity around subscribers and ARPU may be the clearest indication on who is winning and losing the streaming wars.
Globally, the top four streaming companies are Netflix, Disney, Amazon Prime Video and WarnerMedia’s HBO and HBO Max. Netflix has 208 million paying subscribers, of which 74.4 million are in the United States and Canada; ARPU for US and Canada is $14.25. The streaming giant doesn’t take advertising revenue, so it doesn’t need to disclose finances related to commercials. Disney+ (including Hotstar) has 103.6 million subscribers, with $3.99 global ARPU. Disney includes the significantly cheaper and faster growing Indian streaming service Hotstar in its Disney+ customers. It doesn’t clarify how many of its streaming customers are on a free trial. WarnerMedia’s HBO and HBO Max has 63.9 million global subscribers, of which 44.2 million are US subscribers. It has an ARPU of $11.72 per month. Some pay-TV customers get HBO Max for free because they already pay for HBO. Amazon Prime Video has more than 200 million global subscribers. The company is said to be playing a different game than other streaming services as most Prime members aren’t subscribers just for the video. They subscribe for free and fast shipping on Amazon packages, whole foods discounts and other benefits.
With growth comes the threat of piracy and illegal streaming. These are key factors hindering the growth of OTT streaming market. Streaming live TV channels leads to the OTT players’ bulk of traffic. They are also subject to privacy concerns in live streaming. As such the platforms find it increasingly difficult to monitor privacy and illegal streaming with the growth of broadband.