The media and entertainment market is set to exceed $1tn in 2024, driven by the explosive growth in streaming video, but how many people really understand the dynamics behind the trend? IBC365 speaks with Omdia’s Maria Rua Aguete to learn more.
Omdia has compiled some fresh research to be unveiled at IBC2024 “where the focus will be on what consumers watch, where they do so, and for how long,” says Maria Rua Aguete who leads the media and entertainment (M&E) team at the research analyst.
When the global value of media entertainment tops $1tn this year, online video will be the biggest part of that at $392bn. Omdia figures put traditional TV second at $327bn, games (sizeable at $220bn), music ($44bn) and then cinema ($36bn).
Advertising is now the biggest revenue earner in online video (generating 61% of its $392bn total in 2024) and ads are also doing business in gaming (21% of its total). Aguete notes that significant numbers of advertisers are investing in campaigns across games, traditional TV and online video.
Online video advertising will be by far the number one source of revenue by 2029, where Omdia project it will rake in $362bn alone. This is followed by subscription streaming revenues and then pay-TV.
“In fact we can see how streaming video revenues will overtake that of pay-TV by 2028,” she says.
If you remove social media video from the total advertising pie, then what is bigger - subscription video or advertising video? The answer according to Omdia is that by 2029, SVOD revenues will be at $185bn compared to premium AVOD at $141bn with TikTok not far behind on over $100bn in that time frame.
Pay-TV outlook
“The pay-TV bundling strategies of service providers have pushed the pay-TV only home into sharp decline” Maria Rua Aguete, Omdia
Here’s another stat: By 2026 there will be more homes globally watching free content online than they will do via a traditional free television.
While in 2024, most (57%) of free TV being viewed was on broadcast TV, this reduces to 46.7% in 2026 and to 39% by 2029 as viewers move to free and free ad-supported content online.
“Back in 2016, the global composition of all homes paying for TV – either pay-TV or streaming – was dominated by traditional pay-TV,” says Aguete. “In fact, back then, 74% of all homes paying for either a streaming service or pay TV were subscriptions to pay-TV only, and only 6% had a streaming-only service.”
Omdia will show that by 2029, 44% of people will have both pay-TV and SVOD, but the number of homes taking only pay-TV will have declined dramatically to 30% while those taking SVOD only will have risen above a quarter of all households.
“The switch to online is clear,” she says. “The pay-TV bundling strategies of service providers have pushed the pay-TV only home into sharp decline.”
There’s more to being entertained than the living room
Aguete will also cover the rapidly growing media consumption space of the ‘connected car’. There will be 555 million more connected cars on the road by the end of the decade than at the start.
“At IBC there will be lots of people talking about the connected car and it is really important because the market here will grow to be worth almost $1bn by 2030. Having a presence in the connected car will be a hot topic at IBC 2024.”
Highlighting the top 10 video services per country, Aguete reveals some distinct differences in consumption habits albeit that across the board it is YouTube that stands out as number one.
In the US, for instance, Instagram Reels scores highly with more people watching video on the Meta-owned platform than on Netflix. Three social media services rank in the top four in the US but free ad-supported TV (FAST) channels including Tubi and Roku also have a strong top 10 presence.
In the UK and France by contrast, public service broadcasters are prominent in the top 10. German consumers prefer to watch Prime Video over Netflix while in Brazil and South Korea, Samsung TV scores a top 10 hit with its range of FAST channels.
CTV operating systems
“Smart TV companies with FAST services can be seen as frenemies” Maria Rua Aguete, Omdia
“Globally, the Smart TV OS leader is Samsung. What if Samsung TV start producing their own content?” poses Aguete.
A major section in her presentation will focus on the battle for the TV operating system (TV OS).
“Smart TV companies with FAST services can be seen as frenemies,” she says. “The media owners and operators that LG or Samsung partner with, for example, include channels provided by Pluto TV, Tubi and Rakuten.”
Samsung TVs skew towards affluent owners, Omdia report, although many users attached laptops and games consoles and even STBs to their Samsung TV, often bypassing the TV’s own CTV apps.
How much time people spend watching the top 10 services is a question that Aguete says she gets asked a lot – and at IBC she will provide the answers.
“We know that consumers go to YouTube more often that they go to Netflix, but how does that add up? In the US, for example, more than 100 billion hours of YouTube were watched in 2023 and 60 billion hours of TikTok which is double the time they spent watching Netflix which had about 38 billion hours.”
How does that compare to using online services for browsing? Omdia’s stats reveal that the third most viewed service after YouTube and TikTok in the US was Facebook but even on Meta’s social media platform users are spending more time watching videos than actually browsing. “Video has become critical for all social media platforms,” she says.
If you divide the total viewing hours by population then you can figure out how much time people spend watching and something interesting happens. Doing this per head of population in the US shows that the average YouTube user is spending 53 minutes per day on the site, 30 minutes per day on Facebook and 19 minutes per day on Netflix.
“Since you cannot really compare paying subscribers with people watching for free I did a deeper analysis per user to take into account subscribers to Netflix. When you do that in fact the most engaged users are Netflix ones who are spending 90 minutes a day with the platform.”
In this analysis, YouTube is second with 81 minutes, TikTok third with 79 and Amazon Prime fourth with 51 minutes per day.
However, you combine video views and browsing/interaction activity and of the leading M&E sites in the US it is Facebook that emerges on top. It has the most active users in the US, despite declines in its overall subscribers.
Globally, YouTube is mainly watched on the smartphone (63% of people do so according to Omdia) another 27% watch the Alphabet site on a Smart TV.
Conversely, with Netflix most people (58%) watch it on their Smart TV but it’s interesting that 30% of people also do so on their smartphone.
Another slide highlights which devices people watch on. In the UK, most people watch through Smart TVs, as they do in Germany. STBs are important in South Korea but in this market the smartphone dominates.
Aguete is also at IBC presenting Omdia findings around 4K. This will take the form of a round table at IBC for members of the World Ultra-HD Video Industry Alliance (UWA). While there are more than one billion 4K TV sets around the world today, most of them still in use, 4K content continues to lag behind. She says, “We’ve been speaking about 8K for some time but what about content? Is there enough content for consumers to watch?”
Maria Rua Aguete presents the latest research and analysis at IBC2024 in the session ‘Media & Entertainment key themes and trends’ on Saturday, September 14, 1:00-1:30pm and on ‘The Future of Content Viewing’ on September 14, 1:30-2:15pm.
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