Thematic streaming services set to deliver US$2.8bn this year

Thematic subscription streaming services will be generate over US$2.8 billion this year, while global paid OTT video subscriptions are set to reach one billion by the end of 2020, according to a new report released by Magine Pro, with data from Digital TV Europe’s sister research house Omdia.

According to the report, OTT numbers will rise by 20% year-over-year over the coming five years, driven by both new product launches and the ongoing uptake of current subscription video platforms.

The expansion means there will be increasing room for both general entertainment and thematic services according to Omdia, which forecasts that revenues generated by thematic OTT video subscription services will be over US$2.8 billion this year alone.

According to Digital TV Europe’s annual survey, which also provided data for Magine Pro, stakeholders in the TV industry believe that the majority of consumers are more likely to choose an extra thematic niche service on top of their existing general VOD services instead of adding another new general entertainment service.

“The view from our readers is that there is more room for niche services than for more general entertainment offerings,” said Stuart Thomson, editor of Digital TV Europe, in a recent webinar on the topic featuring expert views from Omdia, Magine Pro and Spanish OTT service provider FlixOlé.

New and exclusive content is a key success factor. Just as for the mainstream services, an updated library of exclusive or original content is a key element for both acquisition and retention of subscribers, according to the report. High retention is an even more important success factor for thematic services as their supplementary nature means they are more sensitive to changes in consumer habits and market economics. That means that thematic services need to have a constant influx of content to maintain long term retention.

“To achieve audience reach, telcos can immediately give access to millions of subscribers. At the same time, thematic services can help telcos to differentiate against the competition. This creates an ecosystem with opportunities from both sides,” said Matthew Wilkinson, CEO of Magine Pro.

“We believe that the best way for thematic content providers who want to go directly to consumers is to find a solution that enables them to focus on their content, their audience and their marketing. We have developed our platform to meet the right cost levels needed for this type of services, and at the same time be able to offer their subscribers a premium experience.”

The report can be downloaded here.