Is streaming subscription growth on the decline?

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Dollars that consumers spend on video-streaming services, such as Netflix and Hulu, continues to grow, but there might some cause for concern.

Boston-based research firm Strategy Analytics expects consumers to spend $6.62 billion this year on streaming services. That’s up from $5.43 billion last year. While the 22 percent increase sounds impressive, the previous year’s increase was 29 percent. This marks the first time that the increase in spending has dropped from the previous year.

“We’re not saying the market isn’t going to grow,” Michael Goodman, digital media director for the firm, told USA Today. “We are saying the real growth is going to be a little bit less each year, because every year that goes by we are getting a little bit closer to the market being saturated.”

According to the study, Netflix leads the market in spend, accounting for 53 percent of all subscriptions. The popular streaming company is followed by Amazon (25 percent), Hulu (13 percent) and HBO (1 percent).

Amazon is likely ahead of Hulu due to other benefits as part of Prime subscriptions. According to a CutCableToday study, 20 percent of Amazon Prime members still aren’t using its video streaming service.

There is already evidence that streaming companies are evolving, bracing for slower growth. Hulu last month announced it’s going to offer a live streaming service similar to Sling TV’s offering. Netflix, likely anticipating the growth, inked a deal in 2012 to give it exclusive pay-TV home rights for Disney live-action and animated films beginning this September.

What’s going to be important to watch is what companies like Apple and Google ultimately offer. There have been multiple rumors of Apple working to strike deals with cable operators and broadcast networks to build its own over-the-top streaming service, but nothing has come to fruition. If it would, the space would be even more crowded.

If and when that happens, consumers, who tend to have at least two streaming subscriptions, will need to decide if they really need to be shelling out more than $10 per month for streaming content.

Andrew Dodson

Andrew Dodson is a journalist from Michigan who writes for MLive.com, the state's top online news source. Email him at andrewdodson@streamingobserver.com.
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