Convergence Says OTT Revenue Rose 35% in 2020, Linear TV Revenue Fell 6%

Netflix
(Image credit: Netflix)

 

Revenue from over-the-top streaming TV providers like Netflix, Hulu, Amazon Prime Video and HBO Max rose 35% to $29.6 billion in 2020, and could double to nearly $60 billion by 2023, according to Convergence Research Group’s 2021 The Battle for the American Couch Potato report. 

At the same time, linear revenue from cable, telco TV and satellite TV dipped 6% to $94.7 billion, according to Convergence, and is expected to fall another 6.5% in 2021 and by 10% in 2023. Driving that decline is the continued erosion of traditional pay TV subscribers. Convergence estimated traditional TV lost about 6.49 million subscribers in 2020, and will shed 7.35 million in 2021. The research company estimates that in 2023, those pay TV outlets will lose another 7.76 million customers.  

Convergence based its analysis on 80 OTT providers, including Netflix, Hulu, Amazon Prime Video and HBO Max. The research company said it expects the average number of OTT subscriptions per household, currently at three, will grow to five by 2023. That coincides with Convergence’s prediction that the number of homes without a cable, satellite or telco TV subscription will grow from 42% in 2020 to 60% by 2023.

“Pressure on programmers and TV access providers to keep up spending in order not to lose programming primacy shows no signs of abating,” Convergence said in the report. “Major programmers face a complicated trajectory, not only in terms of competition but balancing their linear & OTT programming, advertising, theatrical distribution, as well as DTC OTT businesses. Though in decline, traditional US TV access, advertising, programming is still a $220 billion business.”  

Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.