TBI Tech & Analysis: Tapping into TV & streaming’s key trends for 2024

Gaslit

As the industry reflects on the trials and tribulations of 2023, Omdia analysts Rob Moyser and Matthew Evenson look at where the industry heading and pick out the key trends to watch across the next 12 months.

Since 2019, the pay-TV and online video markets in Europe have experienced different fortunes.

Minor increases in Eastern European pay-TV subscriptions have not been enough to offset larger declines in Western European, resulting in a small but steady overall decline.

The share of pay-TV subscriptions has shifted slightly but Western Europe still accounts for approximately 55% of total subscriptions.

Total European online video subscriptions, meanwhile, have increased significantly since 2019, when the total stood at a little over 120 million.

Widespread coronavirus lockdowns drove a notable increase in 2020, with further increases set to take the total number beyond the 300 million mark in 2024.

By this time, Western Europe subscriptions will account for over 86% of the total online video subscriptions, due to the strength of pay-TV in Eastern Europe and therefore slower adoption of online video services.

Both pay-TV and online video subscriptions will continue to follow these directions of travel in 2024. Beyond that, industry eyes will be tracking how high online video can realistically go and how well pay-TV will continue to hold its ground.

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Strength in numbers

Key trends to watch include the rise of wholesale subscriptions leading online video growth. Bundled subscriptions are set to become the driver of online video growth in Europe as consumers value the convenience that bundled packages can offer.

Europe is also reaching peak subscription streaming saturation. With consumers facing more choice than ever before, some online video services will need to rein in their operations and plans in some markets. Instead, they will focus on key markets to deliver profits and secure a long-term future.

AVOD will be a key driver of growth in the SVOD market. All major services are set to launch their own hybrid tiers in 2024, driving customer uptake and generating higher and more diverse revenue streams.

Interest in sports rights remains high for many SVOD players, but achieving profitability will take precedent in 2024.

Both DAZN and Amazon are looking to prioritise revenue profitably to acquire more sports content with DAZN increasing its prices and Amazon moving towards AVOD.

Market overcrowding

2022 saw Netflix’s first quarterly subscriber loss in more than a decade, which triggered a reassessment of streaming’s long-term potential from the industry at large.

It was perhaps inevitable, then, that 2023 would see the closure of several services, with many companies shifting their focus from chasing subscriber growth to achieving profitability.

Gaslit streamer Lionsgate+ exited most of its European markets, focusing on core English-language speaking markets. French broadcaster backed Salto closed after just over two years in the market having amassed around 800,000 subscribers in that time.

In July 2023, Viaplay announced its intention to “downsize, partner, or exit” from many of its markets to focus on its core Nordic markets as well as the Netherlands. The company cited the cost-of-living crisis, the high cost of content (particularly sports), and higher-than-expected churn.

With many countries still navigating through a cost-of-living crisis, 2024 may bring more service closures as consumers more carefully consider their streaming entertainment options.

There may be useful opportunities for service bundling and aggregation, but consumers do not have unlimited money or time to spend on video services even if the market continues to demand this of them.

The excerpt above comes from Omdia’s 2024 Trends to Watch: TV & Online Video In Europe, November 2023, which has been written by Rob Moyser, Senior Analyst, TV & Online video and Matthew Evenson, Research Analyst, TV & Online video. Omdia and TBI are both part of Informa Tech.