Annual online television and video revenues in the United States and Canada will increase from US$2.5 billion in 2010 and $15 billion in 2015 to exceed US$25 billion in 2021. Advertising is expected to overtake subscriptions as the main source of revenue. Latin America will see a significant increase in online video subscribers, with revenues forecast to increase to US$3.5 billion in 2021.

The North American market is the most mature in the world, with over 80 million subscriptions, expected to reach almost 110 million by 2021, although some homes will have more than one subscription.

“It is important to stress that these figures are gross — some homes take more than one SVOD platform — especially in the US,” said Simon Murray, author of a new report from Digital TV Research.

“We do not believe that 86% of US TV households or even 97% of US fixed broadband households will be SVOD subscribers by 2021. From the 101 million US total in 2021, we forecast that 25 million will be secondary SVOD subscriptions. Therefore, the average US SVOD user will pay for 1.33 subscriptions. Putting it another way, there will be 76 million US primary SVOD users by 2021.”

Subscription video on demand revenues will exceed US$9 billion a year in 2021, or 35% of the total, down from over 40% in 2015. The figures are based on an attribution of half of the Amazon Prime fee to video.

The forecast suggests that advertising will become the main revenue source for online television and video services in North America by 2018. Advertising on online video services generated revenues of $5.65 billion in 2015, forecast to reach nearly $11 billion in 2021, or over 40% of total revenues.

Online rental revenues are projected to decline to just over $2 billion in 2021, as subscription services are seen as a more attractive substitute to rentals. Revenue from download to own, or electronic sell-through, will increase to around $2.5 billion in 2015.

Americas online television and video revenue 2010-2021

Online television and video revenues in Latin America are expected to increase from just over $1 billion in 2015 to exceed $3.5 billion in 2021, with subscriptions being the largest source of revenue. The number of subscribers, across 18 countries, is forecast to rise from 11 million at the end of 2015 to approaching 32 million in 2021.

To put these numbers in context, pay-television revenues in North America and Latin America are around $120 billion a year.

The North America OTT TV and Video Forecasts and Latin America OTT TV and Video Forecastsreports are published by Digital TV Research.