US subscription streaming business not in recession, new data shows
The Great Streaming Recession might be a myth, after all.
In fact, the growth rate of US consumer spending on subscription video-on-demand (SVOD) services doesn’t even appear to be slowing down.
Omdia, an Informa-hosted research firm that provides SVOD spending data through the Digital Entertainment Group’s (DEG) Quarterly State of the Video Business Reports, said SVOD revenues in the United States United had risen 16.6% to $7.426 billion in the second quarter.
Added to this is a very similar year-over-year growth rate of 16.8% in 2021.
Market leader Netflix has seen its global revenue expansion slow from a rate of 19.4% in the second quarter of 2021 to just 8.6% in the second quarter of this year. And Netflix predicts global revenue growth of just 4.7% in the third quarter.
With Netflix losing customers in the United States and Canada over the past two quarters, an industry-wide assumption has begun to take hold that perhaps the subscription streaming business isn’t isn’t technically in a recession…but it’s growing slower than ever.
Relying primarily on data provided directly by media/entertainment companies, DEG accounts for non-advertising expenditures for movies and TV shows. And with the COVID-fueled shutdown of the theatrical release pipeline for most of 2020 and virtually all of 2021, SVOD is the only DEG track in the industry that’s not in recession.
This includes the rental and sale of digital films and TV shows – the VOD business, for example, was down 15.2% in the second quarter.
But with the theatrical pipeline back, DEG says the trendlines have moved up. In the second quarter of 2021, for example, the VOD and “electronic sales” categories fell by almost 40%.