Video Streaming App Market [Sector Profile]

David Curry

Updated: November 26, 2020

In the mid-2000s, improvements to data speeds and broadband costs led to an explosion of first generation video streaming services. 

A group of ex-PayPal employees founded YouTube in 2005. Seeing the success of it, DVD rental company Netflix scrapped its planned streaming device and launched an internet-based streaming service instead. 

Only a year after the launch of YouTube, Google acquired it for $1.65 billion. At the time, it was seen as an extravagant purchase, for a nascent technology which hadn’t generated any meaningful revenue. But, for Netflix and Amazon, it was confirmation that this market was set for spectacular growth in the next decade. 

Amazon launched Prime Video in 2006 and across the pond, the BBC launched iPlayer in 2007. All of the inaugural players were active, although it would take a few more years for recommendation systems to mature and revenue to generate. 

In China, the earliest platforms had already begun operations before YouTube. Youku and Todou, the original pioneers of video streaming, launched in 2003 and 2005, respectively. It would be five years before Tencent, Alibaba and Baidu took an interest in the market. 

Baidu launched iQiyi in 2010, which was the first foray into premium video streaming in China. Tencent Video came shortly afterwards, although until 2013 both were primarily focused on free, user generated content. 

A major turning point in video streaming came in 2013, when Netflix debuted House of Cards, its first original series. Until then, Netflix, Amazon and other streaming services spent almost all their content budget acquiring older TV shows and movies, which had already been released on television or in the cinema. 

With this move, Netflix altered the power dynamics, by showing it could create quality content that millions would watch. In the next few years, it would launch some of the most popular TV shows of the decade, including Orange is the New Black, Stranger Things and Narcos. 

Amazon would follow suit in 2015, with the launch of The Man in the High Castle and Mr. Robot. Even Hulu, a streaming service owned by the media corporations as a way to combat Netflix’s success, began publishing its own shows. 

Netflix, encouraged by growing subscription numbers (60m to 110m in three years), has increased its content spend every year. In 2020, a Wall Street forecast projected it would spend $17 billion on content, up from $15.3 billion in 2019. 

Film and TV studios have not remained static over the past decade. AT&T (owner of WarnerMedia & HBO), Comcast (with NBC), CBS and Disney have all launched streaming services to compete with Netflix. In the UK, BBC and ITV have launched online streaming platforms.

This has caused, at least in the US, Netflix and Amazon to be far more invested in original content for the future. Many of the most popular shows and films on Netflix, such as The Office, Parks and Recreation and the Marvel movies, have been removed in the past two years. 

User generated content has had less of a fun time over the past five years. While revenue and usage has increased, YouTube has been accused of promoting harassment and disinformation, forcing it to change moderation policies to keep advertisers happy. 

The introduction of TikTok to the Western world in 2018 also created a new competitor for YouTube, one which has over 400 million active monthly users in the West. US President Donald Trump accused the app of being a tool for the Chinese government and in September 2020, TikTok owner ByteDance was forced to sell its Western operation to Oracle. 

Bytedance is one of the new wave technology companies in China, competing with the old guard of Baidu, Alibaba and Tencent. It operates Douyin, a Chinese version of TikTok, which also has 400 million active monthly users, and Xigua Video, which has 270 million active users. 

The coronavirus pandemic, far from being a detriment to the industry as it has to its neighbours (cinemas, film studios), has produced a surge in subscribers and revenue. Netflix added 25 million new subscribers in the first half of 2020, far outpacing its projections. 

While that stellar performance has dwindled slightly in the third quarter, we expect the next five years to be fuelled by growth and original programming.

Table of Contents

Top Video Streaming Apps

US Video Streaming App Market

UK Video Streaming App Market

China Video Streaming App Market

Top Video Streaming Apps

YouTubeThe most popular video streaming service in the world, with over two billion active users. Has a Premium offering which removes ads
NetflixNetflix is the largest paid-for video streaming service in the world, with 195 million subscribers and a $17 billion annual content spend
Amazon Prime VideoOne of the many perks of an Amazon Prime subscription, which has become a force in its own right with hundreds of original 
Disney+Launched in November 2019, Disney+ is already a global force in the video streaming market, with over 70 million subscribers worldwide
Apple TV+Apple has the deepest pockets of any company in the world, and is expected to shell out billions to make Apple TV+ a popular service
HuluHulu has a wide range of US television series, alongside a growing library of original content. It is owned by Disney
PeacockNBC Universal’s attempt to compete with Netflix. The network holds the rights to popular series Parks and Recreation and The Office
HBO MaxHBO Max is the latest video streaming service for HBO content. It also includes films and TV shows from Warner Media
BBC iPlayerThe premier streaming service for UK television programmes, including Doctor Who, Sherlock and Planet Earth
ITV HubThe other half of British TV programming, responsible for hit TV shows Love Island, Downtown Abbey and Broadchurch 
Tencent VideoChina’s most popular video streaming service in usage and subscribers, broadcasts content from the BBC 
iQiyiBaidu’s video streaming service, the first to sign licensing agreements with Western production companies, including Netflix 
YoukuThe original video streaming service in China, somewhat overshadowed by Tencent and Baidu’s move to premium content
HotstarIndia’s most popular video streaming service with over 300 million active users, acquired by Disney in 2020
TwitchThe most popular streaming service for video gaming, owned by Amazon. Twitch has over 150 million active users
DouYuChina’s video game streaming industry is booming and DouYu is the most popular service, with over 170 million active users


 

US Video Streaming App Market

US Video Streaming App Revenue

YearRevenue
2015$7.1 billion
2016$9.3 billion
2017$12.5 billion
2018$15.2 billion
2019$18.8 billion
2020$24.1 billion

Revenue during the COVID-19 pandemic has surged, as millions of Americans were forced indoors due to lockdowns. More cable operators have launched video streaming services; we expect revenue per user to increase in the next few years as a result.

US Video Streaming App Subscribers

Video Streaming AppSubscribers
Netflix75 million
Amazon Prime Video50 million
Disney+45 million
Apple TV+40 million
Hulu35 million
NBC Universal Peacock15 million
YouTube Premium15 million
HBO Max8.5 million
ESPN+8.5 million
CBS All Access4.5 million
BritBox1.5 million

The US video streaming landscape continues to grow every year, as more cable providers take their library off Netflix and Amazon and launch their own service. Peacock and Disney Plus are the latest additions to the trend.

While fragmenting the market and increasing the monthly cost of direct debits for customers is bound to cause some fatigue, it appears to be a like-for-like swap for many customers from cable to internet entertainment packages.

Note: Amazon Prime Video and Apple TV+ subscription numbers are estimated. 

US Video Streaming App Usage

Video Streaming AppUsage
YouTube150 million
TikTok80 million
Netflix75 million
Disney+45 million
Amazon Prime Video40 million
Twitch35 million
Hulu35 million
Apple TV+15 million

YouTube dominates the free-to-access video streaming platforms, with almost three quarters of the US adult population active users. Twitch, an Amazon owned subsidiary, has a strong hold on video game streaming, fending off both YouTube and Microsoft.

It should be noted both Prime Video and Apple TV+ numbers are lower than subscribers. In Apple’s case, most subscribers are on a free year trial, and many won’t be active users. About one in five Prime subscribers said they didn’t use Prime Video.

US Video Streaming App Projected Revenue

YearProjected Revenue
2020$24 billion
2021$27 billion
2022$30 billion
2023$34 billion
2024$38 billion
2025$42 billion

Barring another pandemic which forces Americans indoors, we expect US video streaming revenue to grow at a steady if somewhat subdued rate. Some cable providers may bow out or bundle services into a larger service, similar to BBC and ITV’s BritBox.

We may see some fatigue about the increase in direct debits to streaming services, although we don’t think this will harm the industry in any meaningful way. We expect Netflix and Amazon to continue to spend billions on original content every year.


 

UK Video Streaming App Market

UK Video Streaming App Revenue

YearRevenue
2015£0.5 billion
2016£0.8 billion
2017£1.3 billion
2018£1.7 billion
2019£2.1 billion
2020£3.0 billion

BBC and ITV are starting to employ digital ideas on content lifespan, recently signing new contracts which allow them to keep TV shows online for over a year. This should improve viewership on these platforms, although it may conflict with hopes of BritBox succeeding in the UK.

Netflix and Amazon have both pledged to spend more on British programming. The American giants can clearly see the value of British-made content, with the global success of many BBC TV series, including Doctor Who, Planet Earth and Sherlock.

UK Video Streaming App Subscribers

Video Streaming AppSubscribers
BBC iPlayer25 million
Netflix13 million
Amazon Prime Video7.6 million
Disney+4.6 million
Now TV1.6 million
ITV Hub+0.5 million
BritBox0.5 million

The UK media landscape remains dominated by two broadcasters, BBC and ITV. While Netflix has seen a large uptick during the coronavirus pandemic with 13 million subscribers, BBC and ITV are set to remain the two key producers in the next five years.

Attempts by ITV to create a premium package, in the form of Hub+, have been rather unsuccessful. The broadcaster is stuck in a hard place, unable to offer a premium digital package with exclusive content without harming its primary business.

Note: ITV is not represented as the Hub is free to use in UK. 

UK Video Streaming App Usage

Video Streaming AppUsage
YouTube35 million
BBC iPlayer30 million
ITV Hub30 million
Netflix13 million
TikTok6 million
Amazon Prime Video5 million
Disney+3.5 million
Twitch1.5 million
Now TV1.5 million

As is the case in the US, YouTube leads the pack when it comes to usage, although not by as large a margin. BBC iPlayer and ITV Hub are both accessed by over half of UK adults; most TV manufacturers and smart hub providers pre-install both apps onto UK sets.

UK Video Streaming App Projected Revenue

YearProjected Revenue
2020£3.0 billion
2021£3.3 billion
2022£3.6 billion
2023£4.1 billion
2024£4.4 billion
2025£4.8 billion

It’s unlikely that the UK will be in a similar state of overwhelming choice, as is the case with the fragmentation of video streaming in the US. Instead, we expect BBC and ITV to continue to broaden their online portfolio, while Netflix and Prime Video continue to make inroads.


 

China Video Streaming App Market

China Video Streaming App Revenue

YearRevenue
2015$7.7 billion
2016$9.6 billion
2017$11.2 billion
2018$13.6 billion
2019$15.5 billion
2020$18.1 billion

China’s revenue growth has been primarily powered by freemium services, although Tencent, Baidu and Alibaba have seen some growth in their paid-for services in the past few years.

This is largely due to the introduction of non-Chinese films and TV shows, which iQiyi started acquiring the rights to in 2015. Since then, Tencent and Alibaba have made significant investments to expand their premium libraries.

China Video Streaming App Subscribers

Video Streaming AppSubscribers
Tencent Video115 million
iQiyi105 million
Youku85 million

Similar to a lot of industries in China, Tencent, Alibaba and Baidu are the three major competitors. Tencent Video is the largest platform in the country, for both subscribers and users, with Baidu’s iQiyi competing heavily for that first spot.

Alibaba’s Youku is considered the closest to Chinese YouTube out of the three, but recently added films, TV and other subscription content.

In comparison to the US and UK, Chinese users spend a lot less on video content. Tencent and iQiyi’s revenue per user is less than $2 per month, far lower than Netflix and other streaming services.

China Video Streaming App Usage

Video Streaming AppUsage
Tencent Video900 million
iQiyi500 million
Youku500 million
Douyin (TikTok)400 million
Xigua Video270 million
DouYu180 million
BiliBili170 million
Huya150 million

Much of the video streaming market is freemium, powered by shopping, gifting and advertising. The three leaders in subscribers are leaders in users as well, although ByteDance could be considered a fourth player with Douyin and Xigua Video.

DouYu and Huya both compete for the video game streaming market, similar to Twitch in the West.

China Video Streaming App Projected Revenue

YearProjected Revenue
2020$18 billion
2021$20 billion
2022$23 billion
2023$26 billion
2024$30 billion
2025$34 billion

While the video streaming industry is large in China, it is not as lucrative as the US, due to the low revenue per user. Online advertising has also not matured in the same way in China as it has in the West, with platforms like Facebook and YouTube.

There has been moderate success in drawing customers in, but Tencent, iQiyi and Youku are still not investing as much into original content, in comparison to Netflix, Prime Video and Disney Plus.

By signing up you agree to our privacy policy. You can opt out anytime.