The transition is proving painful as streaming costs and red ink has ballooned. A difficult economic climate with high inflation now has most streaming services offering a version with advertising. This entire shift is extremely delicate, since traditional television, albeit declining, is still what provides the cash to fuel streaming expansion.
“The biggest tectonic move continues to be the rise of ad-supported streaming. AVOD will be the main driver of growth in the US OTT sector across the forecast period,” it said. Revenue increasing at a 14.2% CAGR – well ahead of SVOD’s increase at a 6.1% CAGR – and growing its share of total revenue from 34.8% in 2022 to 44.3% in 2027.”
The 2027 total U.S. OTT video revenue reps only 4.3% year-on-year growth from the year before, just one-fifth the rate seen at the start of the forecast period in 2022, and a fraction of the 35.3% seen in 2020 at the height of the pandemic when coronavirus lockdown restrictions created the perfect conditions for record-setting subscriber growth, PwC noted.