US consumers expected to spend $26 billion on music and video subscriptions in 2019

US consumers expected to spend $26 billion on music and video subscriptions in 2019
The subscription model has become the go-to model for entertainment businesses. A recent study points out that US subscribers are poised to spend a whopping $26 billion on their music and video subscriptions this year. Does this indicate that there is enough appetite for new offerings? Shashank Venkat with the report

According to a new study by the Consumer Technology Association, streaming services will continue to grow in popularity in 2019. The study estimates that US consumers will spend $26 billion on their video and music subscriptions this year. The numbers are higher than the $20.4 billion spent in 2018, and nearly double the amount spent on streaming services in 2017, highlighting the accelerated growth in the subscription streaming industry over the past couple of years.

The study further details that the revenue specifically from SVOD services is expected to hit nearly $17.7 billion in 2019, up 25% year-on-year. The report credits live TV services as one of the major reasons for the continued momentum in paid video streaming services.

On the other hand, music streaming services such as Spotify and Apple Music are also expected to do well, with music streaming revenue in the US expected to hit $8.4 billion. This equates to 33% growth over 2018, suggesting that music streaming services are growing faster than video streaming services.

Interestingly, these numbers continue to lag behind video games which are expected to generate $39 billion in revenue in the US this year, growing to $42 billion next year. With gaming companies now increasingly embracing the subscription model, there remains little doubt that the space will continue to garner momentum in the coming years.

What subscription fatigue?

Growth in the music streaming and SVOD industries is expected to continue next year with revenue projections estimated at $32.3 billion. Video streaming options are set to explode with the launch of Disney+, Apple TV+, AT&T’s WarnerMedia and other local streaming options. Meanwhile, Apple Music, Spotify and other music streaming players are also expanding their breadth of offerings with non-music content such as podcasts.

This brings us to the question – is subscription fatigue as big a problem as the industry makes out? The horizontal and vertical growth of subscription video and music streaming services, combined with an increasing customer appetite for such services, indicates that businesses are able to find new sweet spots to engage subscribers. Add to this the rise of new entertainment options such as VR streaming, other new types of subscription experiences and the emergence of new models such as micro-subscriptions, and the future indeed looks bright for subscription-based entertainment services!