The 2010s changed home entertainment forever. During this decade, power and momentum swung towards global subscription video on demand (SVOD) platforms selling their content directly to consumers. However, the same period may have been a zero-interest rate phenomenon. These subscription streaming giants are here to stay, but their distribution strategy will become increasingly indirect.
Deloitte predicts that the industry will shift away from standalone subscription services towards aggregation, similar to traditional pay TV packages. SVOD platforms need aggregators as they reach saturation in major markets and seek creative ways to reach new audiences and reduce churn. While revenues may still increase with price rises, bundling and password crackdowns, we expect the aggregate number of standalone subscriptions will likely fall.
This shift back towards aggregation, while seemingly regressive, is a necessary evolution for the streaming industry, benefiting both consumers and providers.
The 2010s era was characterised by a sustained growth in the number of households with access to SVOD services, and a steady increase in the number of services used. The initial appeal of streaming services was clear. Video on demand platforms give consumers huge choice at the touch of a button or screen, opening a gateway to hundreds of titles in one place and the ability to pick and choose what service they want. The ability to binge content rather than wait for weekly releases was an unprecedented phenomenon at the time. This, combined with offering ad-free premium, and increasingly original, content made SVOD hugely popular among consumers.
Affordability has also long been a key appeal of SVOD and a factor in its rapid growth. Traditional TV packages typically cost more compared to SVOD services. Not only has this made SVOD attractive for tight consumer budgets, but it also means that many have opted for choosing a few different services to fulfill all their content wants and needs, or “subscription cycling” by subscribing and then cancelling depending on what content is on offer.
Affordable pricing, abundance of choice and strong control over preferences and subscriptions has led to a proliferation of services. Just as with other forms of technology post-pandemic, there has been a level of fatigue from consumers towards products and services that were consumed to a particularly high degree during periods of boredom.
Even more recently, the high cost of living and inflation has led to price rises, and the introduction of new tiers of subscription for various packages added increased complexity and financial pressure on the consumer. This wave of change for SVOD led to a plateau in the growth of subscription numbers, and a plateauing in the number of subscriptions averaged globally. Deloitte research shows a steady increase in the average number of subscriptions per consumer in the European market from 1.3 in 2018 to a plateau of 2.35 in both 2023 and 2024. The same plateau can be seen in the United States, though subscription numbers remain higher than Europe at 4.0 since 2020.
Subscription streaming providers have been looking for new ways to reach audiences and increase subscriber numbers, including crackdowns on password sharing and delving into live broadcasting, games and investing more in original content. However, a peak in the average number of subscriptions consumers own is leading the industry to reevaluate the viability of a marketplace consisting primarily of dozens of individual direct-to-consumer providers.
Deloitte predicts that the “stacking” of streaming on demand, whereby consumers subscribe to multiple standalone SVOD services, will decline in the year ahead. Instead, the likely direction for the industry could be a return to aggregation of content from different providers, more akin to traditional pay TV packages.
Reverting back to a model of fewer bundles and longer-term subscriptions might seem like a backwards step. Yet a return to a version of the aggregation model could create the exact balance that consumers and providers need. For consumers, it could mean a more simplified experience with fewer platforms to navigate, pay for and manage, while also reducing cost and the time spent scrolling through fields of content. A single search bar can open up a more seamless searching experience.
Meanwhile, for SVOD suppliers, aggregation could be an opportunity to combat churn rates that have been steadily rising in recent years, as well as reaching new audiences and revenue streams. We have seen existing aggregation models be relatively successful in recent years in the form of big streamer bundles or cable packages that include streaming. And aggregation is not just happening in media – it is commonplace across a number of industries.
Aggregation can take shape in a few ways. Service bundling, where SVOD subscriptions are tied into pay TV, telecom, or financial service contracts, is already happening and often means discounted rates for consumers compared to purchasing services separately. This helps SVOD providers with churn rates, with subscribers often committing to minimum contract durations, and aids telcos by improving retention.
Elsewhere there is media aggregation, where services get aggregated, most typically by selling multiple services at a discounted rate compared to individual prices. Some smaller SVOD services are also pivoting from standalone direct-to-consumer to add-on channels distributed by aggregators or exiting some markets altogether. FAST (free ad supported television) offerings may also increase, alongside free VOD services.
Standalone SVODs will need to adapt by joining bundles or diversifying to cut through competition, while traditional broadcasters may have the opportunity to reclaim viewers, particularly if they modernise their offerings and invest in digital platforms.
Consumers that look for more streamlined and affordable entertainment may be better served by aggregated content and services, but it is clear there will be some trade-offs in terms of choice and flexibility. Whether these trade-offs are seen as worthwhile will depend on whether SVOD players can continue to provide high quality content that is more accessible and cost efficient.
The bottom line is that the business of television is evolving (again). A shift towards aggregation will clearly bring some challenges, but this is part of a decades-long shift from traditional broadcast to content delivered over the internet.
Standalone SVOD players should consider the role they want to have in this new model, whether that be maintaining full-service SVOD, or taking the lead on aggregating other players’ content in addition to their own.
A purely direct-to-consumer approach is not an easy feat, and distributors will remain crucial for brands and providers in the video industry. For companies that have spent decades generating content for others to distribute, it may be tricky at first to immediately thrive in a direct-to-consumer model. However, aggregation can be a natural turning of the tide to combat high levels of churn, slow growth, and a need to be profitable.
SVOD not being the predominant industry model should not signal complacency from broadcasters who continue to retain the majority of viewing hours in many markets. Collectively, broadcasters should work together to ensure that they are also resilient in their model, and continue to grow their appeal, particularly amongst younger audiences who are driving consumer trends and behaviours.
Either way, aggregation is likely to be a defining feature in the years to come.
Helen Rees is a partner at Monitor Deloitte, specialising in driving value through strategy, business design, and transformation leadership within the media, entertainment, and telecoms sectors.