Revenue in the SVoD market will grow by 53.39%

Between now and 2029, Rethink TV It predicts that revenue in the subscription video on demand (SVoD) market will grow by 53.39%, while the share of advertising revenue will increase by a staggering 134.76%.

The consulting firm presents a new report just when Netflix confirms its commitment to rapidly increasing ad-supported subscription levels. The SVoD services groups have shown a voracious appetite for ARPU growth that subscribers provide with advertising.

The co-CEO of Netflix, Greg Peters, which has supervised the launch of advertising, recently assured when presenting the platform's results that Netflix does not have a “fixed position on a ceiling” for subscription prices.

Rethink TV predicts that SVoD services will continue to squeeze viewers, steadily raising prices for ad-free tiers. Which begs the question: could ad-free tiers be removed entirely?

The author of the report, Alex Davies, principal analyst at Rethink TV, highlights in the report that The drop in prices has reduced the problem of turnover, so, although the ARPU increases, the average subscription duration decreases, as viewers switch more frequently from one service to another.

"In short, we have revised downward the total historical number of subscribers, while increasing the penetration rate of advertising-supported customers. In 2024, revenue from advertising-supported users represents 26.22% of the total. In 2029, this figure stands at 40.14%," he assures.

Removal of advertising?

There are many wild card decisions that services could make over the next five years. The most far-fetched would be the complete elimination of their ad-free plans, "but it is clear that viewers' aversion to ads is a lucrative opportunity. They will continue to squeeze these viewers, constantly raising prices for ad-free slots and eliminating ad-free slots completely," Davies says.

In total, the Revenues go from 93.42 billion dollars in 2024 to 143.3 billion in 2029, 53.39% more. The Share of advertising revenue grows from $24.5 billion to $57.52 billion during this period, an increase of 134.76%, indicating the growing popularity of ad-supported levels.

It's less clear whether consumers voluntarily decide to downgrade an existing subscription or whether new customers prefer cheaper tiers, and the services are in no rush to reveal that detail. Extensive consumer surveying to determine that relationship is outside the scope of this forecast, but it is clear that services prefer their customers to see ads, due to better margins – with evidence suggesting that new customers accept ads.