Password crackdowns may lead to free video surge, Omdia study suggests

By NewscastStudio

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The online video landscape is on the verge of a significant shift as paid service users increasingly gravitate toward free options, according to a recent study by market research firm Omdia.

After a decade where cord-cutting was the defining trend, with pay-TV subscribers flocking to paid online video platforms, Omdia’s research points to 2024 as the year when a new pattern emerges.

This transition from paid to free online video services, labeled as “P2F,” is fueled by a variety of market developments.

One such driver is the crackdown on password sharing by streaming platforms. While this has temporarily bolstered subscription numbers, Omdia anticipates the effect will be short-lived.

The segment of customers gained through these measures is expected to be particularly susceptible to the P2F shift next year, especially as the industry faces production strikes and reduced programming budgets that may lower content quality.

Furthermore, the ongoing cost-of-living crisis is likely to accelerate this trend. As streaming services hike their prices to sustain profitability, the allure of free alternatives, such as Advertising Video on Demand (AVOD) and Free Ad Supported TV (FAST), is predicted to rise.

Despite this, Omdia sees potential for the continued growth of paid online video if streaming services navigate the introduction of ad-supported tiers effectively.

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Maria Rua Aguete, Senior Research Director at Omdia, stresses the importance of managing ad loads carefully to avoid disrupting the viewer experience. She notes that while there is a transition towards free services, there remains a substantial opportunity for paid platforms to prosper. However, she cautions that aggressive price increases and poor ad implementation could jeopardize this growth.

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