How Streaming Revenue Will Surpass Pay TV Subscriptions In The U.S. Before 2025

By Thea Felicity

Feb 27, 2024 12:37 PM EST

(Photo : Photo by CHRIS DELMAS/AFP via Getty Images)
In this illustration photo taken on July 19, 2022 the Netflix logo is seen on a TV remote in Los Angeles. - Netflix reported losing subscribers for the second quarter in a row Tuesday as the streaming giant battles fierce competition and viewer belt tightening, but the company assured investors of better days ahead. The loss of 970,000 paying customers in the most recent quarter was not as big as expected, and left Netflix with just shy of 221 million subscribers.

Ampere Analysis predicts that streaming revenue will surpass pay-TV subscription revenue in the U.S. for the first time in the third quarter of 2024, totaling $17.3 billion compared to pay TV's $16.7 billion. 

Hollywood Reporter reveals that the streaming revenue was propelled by various streamers' introduction of ad tiers, heralding a transformation in the entertainment landscape.

The analysis forecasts that streaming's ascendancy will persist as traditional pay TV declines, with pay TV value anticipated to halve by 2028 from its peak in 2017, reflecting shifting consumer preferences and the growing dominance of digital platforms.

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The Future of Streaming Services

Rory Gooderick, senior analyst at Ampere, remarked, "Most major streaming services in the U.S. have launched their hybrid advertising tiers, which, along with increasing clampdowns on password sharing, have been successful at reigniting growth in the streaming market."

The integration of ad-supported tiers across streaming platforms, including recent ventures like Amazon Prime Video's new advertising tier, is identified as a primary driver of revenue growth, with streaming advertising revenue projected to exceed $9 billion in the U.S. this year alone, reinforcing the viability of diverse revenue models in the streaming sector.

Aside from advertising tiers, streaming services are also expanding their reach through collaboration. Earlier this year, VCPost reported that ESPN, Fox, and Warner Bros will be collaborating to provide sports streaming entertainment to the audience.

Not just that, the collaboration between Disney and Charter also allowed millions of Charter subscribers access to Disney+'s advertising tier.

These exemplify strategic partnerships aimed at maximizing streaming's reach while underscoring the enduring role of traditional distribution platforms in aggregating services and retaining subscribers.

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