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Subs OTT revenues to exceed publicly funded TV; Commercial TV growing faster than Pay TV

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Ampere Analysis has offered some interesting insights into funding and competition in the television market. The company revealed figures this week showing that by 2020, subscription OTT revenues will exceed the revenues given to public broadcasters through license fees/taxes. The figure is global and shows that in 2020 subscription OTT will raise $44 billion compared to $39 billion for public funding of TV.

“We are seeing a fundamental shift [in revenue power] away from big public broadcasters,” Richard Broughton, Executive Director at Ampere Analysis declared. The figures and projection provided by the research/analysis company shows the relative revenues at:

  • 2017, subscription OTT $23bn and public TV $38bn
  • 2018, subs OTT $31bn and public TV $38bn
  • 2019, subs OTT $38bn and public TV $38bn.

The story during the next decade makes grim reading for public broadcasters who want to compete on at least equal terms with the growing OTT giants. While their own public fees flatline (at $39bn, $40bn and $40bn during 2021, 2022 and 2023) subscription OTT keeps growing (to $49bn, $53bn and $56bn).

Ampere Analysis also revealed that commercial TV is now growing faster than Pay TV (based on subscriptions revenue versus advertising revenue). The research firm is forecasting that commercial TV will grow marginally faster than Pay TV for three of the four years during 2019-2022 and will have equal growth for the other. Pay TV has grown faster than commercial TV since 2011 until this year, with the exception of 2016, according to Ampere figures. The company says the present turnaround is caused by cord cutting in the U.S.

The final statistical gem focused on market concentration across different ‘verticals’ in the television/video marketplace. Ampere Analysis showed the market share for the top four companies in each vertical and the market share of everyone else. This shows that the TV advertising market is the most diversified followed by Pay TV, then public TV. Online advertising and subscription OTT demonstrate much greater consolidation.

For online advertising the figures were, showing % of global revenue

  • 1 (largest) provider, 49%
  • 2 (second largest) provider, 20%
  • Everyone else, 31%

For subscription OTT the figures were, showing % of global revenue

  • 1 (largest) provider, 47%
  • 2 (second largest) provider, 19%
  • 3 provider, 7%
  • Everyone else, 27%

For public TV the figures were, showing % of global revenue

  • Joint largest provider, 17%
  • Other joint largest provider, 17%
  • 3 provider, 14%
  • 4 provider, 8%
  • Everyone else, 45%

For Pay TV the figures were, showing % of global revenue

  • 1 (largest) provider, 18%
  • 2 (second largest) provider, 10%
  • 3 provider, 9%
  • 4 provider, 6%
  • Everyone else, 56%

For TV advertising the figures were, showing % of global revenue

  • 1 (largest) provider, 6%
  • 2 (second largest) provider, 4%
  • 3 provider, 4%
  • 4 provider, 4%
  • Everyone else, 81%

 

Illustration: Netflix are helping to drive OTT revenues higher than public TV funding.


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