Subscription video-streaming services like Netflix may be booming but their impact on pay-TV broadcasters such as Sky has been “greatly exaggerated”, according to new research.
Consulting firm Deloitte forecasts online subscription video on demand (SVOD) will generate about £5 billion globally this year — or only around 3% of the £168 billion pay-TV market.
“The rise of Netflix doesn’t mean the demise of pay-TV,” said Paul Lee, director of technology, media & telecommunications (TMT) at Deloitte.
Deloitte’s annual TMT Predictions report, out next week, suggests SVOD should be seen less as a direct competitor to pay-TV and rather as complimentary and a replacement for DVD box sets. Lee said the number of pay-TV homes has “barely shifted” in the US even as Netflix, maker of Orange is the New Black, has gone from zero to nearly 40 million subscribers.
The report adds SVOD players will struggle to displace TV broadcasters because viewers want high-end content and it is expensive to produce.
