With new entrants like Discovery+ and Paramount+, the U.S. market could grow streaming subscribers even faster than it did in 2020.
According to UBS, the U.S. will have more than 385 million total streaming video subscribers by the end of 2021, up 50 million versus the 47 million total added in 2020. That type of subscriber growth would also be significantly ahead of the 43 million added in 2019 and 23 million in 2018.
The analyst firm estimates that in the U.S. this year, Disney+ will report 8 million net adds, HBO Max will add 7 million, Paramount+ will add 8 million adds and Discovery+ will add 7 million adds. It said the outlook is supported by its latest UBS Evidence Lab App Download data, which shows continued momentum at HBO Max and Discovery+, which ranks as the fifth most downloaded SVOD app in the comparison set.
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“The focus remains on subscriber growth, which should remain strong in 2021 given new service launches, promotional pricing, shifting film windowing and ramping DTC content production. That said, we remain concerned about these businesses' ability to build on the economics of linear TV - the service they are increasingly replacing,” wrote UBS analyst John Hodulik in a research note.
UBS estimates the average U.S. household subscribers to 2.7 SVOD services, up from 2.3 services at the end of 2019. The firm expects that number will exceed three services per household by the end of 2021 but worries that households could face subscription fatigue or reach a natural limit on the number of services they are willing to pay for on a monthly basis.
“Given the month to month nature of these services, we also believe it's likely that consumers could switch between platforms based on the timing of content releases,” wrote Hodulik. However, he added that the increasing shift of live sports to DTC streaming platforms could increase consumers’ willingness to pay for multiple services at the same time.