Juniper Research predicts there will be nearly 2 billion active subscriptions to on-demand video services by 2025, representing a 65% increase over the end of 2020.
The research company said the “primary engine” for the growth will come from traditional broadcasters like NBCUniversal, which launched Peacock last year, and ViacomCBS, which is relaunching CBS All Access as Paramount+ in 2021. Juniper anticipates that these services will account for $1.4 billion in advertising spend in 2025.
Both Peacock and the soon-to-be Paramount+ use hybrid models that tap into subscription and advertising revenues. Juniper said that as subscription services become increasingly prominent, different models will be necessary for fighting off subscription fatigue. The firm’s latest report estimated that in 2020 there was an average of four SVOD subscriptions per household in the U.S., but that growth could slow significantly in 2021.
“Thanks to this high level of market saturation, streaming providers need to keep their offerings competitive to retain subscribers,” said Juniper Research’s Nick Hunt in a statement. “Hybrid monetization is one way that VOD providers can keep their offerings low-cost, and therefore less likely to be dropped.”
The pandemic and resulting stay-at-home orders helped turn 2020 into a significant year for increased streaming service adoption. According to new research from the NPD Group, the average U.S. consumer now relies on seven different streaming video services – both subscription and free, ad-supported – up from five in April 2020.
Along with growing demand for subscription and ad-supported video, Juniper also predicted that mobile video will continue to grow and that more than 70% of streamed video sessions in the next five years will occur on smartphones.
“However, these do not yield a high number of advert slots per video watched, meaning that smartphone advertising spend will only grow at an average rate of 2% each year over the forecast period.”