The pandemic has pushed the entertainment industry to focus on creating content and games for consumers and attracting a larger user base.
Despite the fact that the transition from legacy to Internet media distribution has significantly reduced the fortunes of movie theatres and television broadcasters, investors remain skeptical of the streaming video model. On the one hand, ~1bn households will transition to or have already transitioned to internet distribution, implying strong revenue growth for streaming platforms. However, because many of these platforms are owned by legacy entertainment companies, their expansion comes at the expense of their other offerings, such as pay TV or home video.
The OTT video streaming market is expected to grow at a 7.6% CAGR through 2026. Companies are concerned that there may not be enough individual subscriptions to support their expansion plans. With top SVOD players investing billions in content development and global expansion, the business models that have propelled them to this point may not provide the future profitability required for the industry to thrive.
Streaming has also become more capital intensive, with spending expected to increase by more than 12% Y/Y between 2022 and 2025 due to an insatiable demand for new content.
In COVID-19, streaming music saw a rise due to people spending more time at home, and this led to an increase in the number of subscribers to music streaming platforms such as Spotify, Amazon Music, Apple Music, and YouTube music as well.
Spotify is the market leader, with a 31% market share. With a 19% global market share, Apple Music is the second largest music streaming service after Spotify. According to findings, Apple Music has a stronger foothold in the US market than Spotify. With a 15% global market share, Amazon Music is the third largest music streaming service after Spotify and Apple Music. It shares a global market share with Tencent Music, the Chinese market’s leader in music streaming. Amazon Music is rapidly expanding and is expected to surpass Pandora in popularity in the United States by 2022. Youtube Music has a 6% market share. Along with the United States, India, Brazil, and Mexico are some of YouTube Music’s largest markets.
– Subhendu Kumar Behera Crispidea analyst
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