TBI Tech & Analysis: On the trail of North America’s TV & streaming trends for 2023

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North America’s TV & online video ecosystems are changing fast, with consolidation, sports and TVOD all likely to affect the industry over the next 12 months. Omdia’s principal analysts Sarah Henschel provides her key trends as we look ahead to 2023.

In 2022, content owners and platform operators have continued to increase focus on integrating advertising and subscription video platforms together.

Disney+ and Netflix announced plans to begin offering advertising tier options to grow total service revenue as consumers begin to reach SVOD service saturation. Most major players in the space now have hybrid models, such as 1883 streamer Paramount+, Hart To Heart’s Peacock, Succession outfit HBO Max and Salvage Hunters SVOD Discovery+.

Transactional video on demand for retail (EST) and rental (VOD) has been growing in popularity among 18–24-year-olds

Sarah Henschel

Now that ad-based platforms are established, the opportunity opens up for live news and sports advertising to enter the over- the-top (OTT) space in a way that previously did not have this type of infrastructure.

As we enter 2023, consumers may benefit from consolidation if fewer services are available in the marketplace. However, total spend across services will not fall as the services continue to increase prices to achieve profitability goals.

TVOD looks set to blend into other business models, as shifting windows continue to put pressure on the home entertainment value chain. Synergies across cinemas, AVOD, and SVOD platforms will allow audiences comprehensive access to TVOD catalogues and will subsequently grow revenues.

Other key takeaways include SVOD service consolidation and the creation of corporate streaming portfolios, es evidenced to date by Disney and Paramount, which continue to position three-plus streaming service portfolios. Live US sports streaming also looks likely to take off with NFL Sunday Ticket likely to move from pay TV and be acquired by a major tech streaming service next year.

TVOD takeaway

Of particular interest to rights holders is the potential of TVOD. This has potential upside in connected ecosystems as customer overlap with AVOD services grows.

While AVOD and SVOD revenue continues to increase as we emerge from the Covid-19 pandemic, TVOD or home entertainment revenue has been relatively flat. Revenue across TVOD, AVOD, SVOD and physical video in 2023 is forecast to be $139bn in the US, up 12% year over year. By far the greater part of this growth (78%) comes from growth in advertising.

Despite these trends, transactional video on demand for retail (EST) and rental (VOD) has been growing in popularity among 18–24-year-olds, according to Omdia’s biannual Consumer Research Spotlight Service surveys.

Google/YouTube and Amazon Prime Video have shown that TVOD can see new users and growth by blending business models under one platform. According to Omdia consumer surveys, Peacock’s free tier, the Roku Channel, Pluto TV, and Tubi all have a higher overlap of customers that use TVOD than most SVOD services do.

Typically, 75% of AVOD users also engage in TVOD. Now that advertising is integrating across multiple platforms, perhaps there is an opportunity to also capitalise on TVOD interest.

The excerpt above comes from Sarah Henschel’s report, 2023 Trends to Watch: TV & Online Video in North America. The full version is available here (subscription). Sarah is principal analyst for media & entertainment at Omdia, the research arm of TBI owner Informa.