Michael Nathanson of investment analysis firm MoffettNathanson says the new streaming wars are in AVOD — advertising video-on-demand services — like Pluto TV, Tubi, and similar platforms. Despite the money that will be flying during the streaming wars, he said, however, in the end, consumers will be the winners.
During a keynote address at the annual Stream TV Show on Tuesday afternoon, Nathanson said that the market size in AVOD services has grown dramatically in the last two years and that there is no apparent slowing of that growth coming in his estimation.
Projected estimates show that additional content from services like Roku Channel, Pluto TV, and Tubi is growing dramatically, especially now that other players — including HBO Max, Paramount Plus, and Hulu have strengthened their positions with regard to advertising-based content.
According to Nathanson, by 2025, the market size in terms of advertising revenue in the United States from AVOD services is expected to grow from an estimated $6.9 billion in 2021 to as much as $18.6 billion.
Nathanson said that as the services grow, not to be surprised if not everyone survives the streaming wars. While big and broad players are in the best position, those niche may also succeed. However, those in the “messy middle”, who lack the global scale and investment dollars behind it are the most at risk.
Companies like Disney, with its well-rounded entertainment and sports programming, including Disney+, ESPN, Hulu, and Star products, are solidly positioned going forward.
In addition, the combined Warner Bros. Discovery offerings of HBO Max and Discovery+, are also anticipated to weather the streaming wars well.
Uniquely, AMC Networks, on the opposite end of the scale, he said, with a slate of niche offerings, including Acorn TV, Shudder, AllBlk, and AMC Plus, will also be in a good place.
The companies in the middle, broad, but without the scale behind it — Fox with its Tubi AVOD product and its Fox Nation DTC platform; ViacomCBS with the strong Pluto TV and seemingly divergent Paramount+, Showtime, and BET+ premium products; and NBCUniversal with its Peacock and Xumo products — are the ones to watch during the streaming wars, especially in terms of how and where things will shake out.
In the end, Nathanson said, consumers will be the big winners, as the services will provide more content for users across the board.