Amazon and Netflix command nearly two-thirds of all SVOD spending: study

Amazon Prime Video and Netflix have clearly exerted dominance in the SVOD market, and both have executed widespread global expansions. Those strategies are paying off for both companies.

According to a new SVOD study from Futuresource Consulting, Prime Video and Netflix together account for nearly two-thirds of global SVOD spending. The two services also accounted for one-third of all subscriptions globally in 2018.

The report points toward Netflix’s most recent quarterly results. The company reported 9.6 million net new paid subscribers, ahead of the 8.9 million it was expecting. The company added 1.74 million new paid subscribers in the U.S. and 7.86 million internationally, up 16% year over year.

David Sidebottom, principal analyst at Futuresource Consulting, said Netflix has demonstrated continued growth in the U.S., the U.K., France and Germany, and that “Netflix has many options for turning profit, each requiring a local market-specific strategy, based on maturity of infrastructure, device usage, access to local content, GDP and market share.”

He said that Netflix’s success is why would-be competitors have to carefully choose their strategies when going up against the streaming service. The firm added that products that are complementary to Netflix have a far better chance of survival and success.

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Amazon and Netflix have clearly led the charge, but other factors have also helped drive overall adoption of streaming services. The study said that SVOD already reaches more than 60% of households in North America, 26% in Western Europe, 21% in Asia-Pacific and 19% in Latin America.

“SVOD has come of age, with consumer spend exceeding $29 billion last year, up 38% on 2017,” said Sidebottom. “Improving broadband quality, increasing smart TV penetration, the availability of services and perceived value are all coming together to create the perfect conditions for growth.”