M+E Daily

The streaming entertainment sector is going to be facing several hurdles over the next 12-18 months, according to James Duvall, principal analyst and head of entertainment at Futuresource Consulting.

The streaming market already faces competition for eyeballs, while FAST channels and a plethora of business models and bundling deals are being marketed to viewers, he said 29 February during the ITS Localisation event in London.

During the session “The Analyst Perspective – There May be Trouble Ahead,” he touched on consumer confusion about the many options available and whether consumers have already chosen their favourite streaming services and are sticking with them.

“Hopefully, from some of the data points that you’ll see, we’ll kind of get a flavour of the ups and downs that are in play” in the sector, Duvall told the audience, noting the data he would be using for the session was taken from his company’s Living With Digital biannual survey. “I’m literally in the process of finishing the report,” he said.

“Last year, when I presented this slide, we were obviously still seeing kind of the impact of cost of living,” with impact coming from high energy costs, inflation and “obviously a general feel that consumers, when being kind of asked about how much they were struggling,” said they had been impacted financially.

One year later, “we’re now, at least in Europe, seeing some of that improve,” he said. “Here in the UK, obviously we’re seeing a kind of an actual marked improvement” in how people are feeling about their financial position, he pointed out. Meanwhile, the US has “kind of plateaued,” he said, noting, “there’s no real changes” there.

Last year’s Futuresource data showed there was a high level of people who said they were feeling worse off, he said.

While “there’s been a marked improvement” in the UK this year, the US has “always relatively been stable,” he said. “But what we are seeing is in Canada, we see a continuing of a worsening position for how our respondents are feeling financially. This is despite obviously the fact that inflation rates are improving there.”

In the past few years, people have been feeling financially “pinched” but there’s been lots of services launched and a lot of entertainment available to be streamed, he said.

Last year, global spending on the sectors that Futuresource tracks totalled $324 billion, and he predicted that will grow a further $10 billion in 2024.

In 2023, subscription streaming spending grew 16 percent, Duvall said. “This year, it’s going to grow and reach $125 billion, at our top end of our estimates, which will be around 37 percent share of the overall categories that we track,” he noted. North America represents the largest percentage of that spending and is expected to come in at $51 billion this year, he said.

Meanwhile, subscription service pricing has increased, and he predicted that it’s “going to be more of a challenge to keep [the] momentum” growing in several markets.

He went on to predict there will be a growing number of people who can access content. That, he said, “throws up a huge amount of opportunities, new markets and new people to be targeting” for streaming service companies.

ITS Localisation was presented by MESA in association with the Content Localisation Council and Smart Content Council, and sponsored by Dubformer, Iyuno, AppTek, EIDR, Blu Digital Group, OOONA, Papercup, and Deluxe.