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Research Outline

Prepared for Robin | Delivered October 4, 2019

Digital Subscribers

Goals

To find the total potential market for all digital subscribers worldwide.

Early Findings

  • The global penetration rate for the internet is currently estimated at 58.8% and 4,536,248,808. Technically, this would be the TAM for digital subscribers.
  • For least developed countries, the rate is 17.5%, 41.3% for developing and 81% for developed.
  • If we want to look at broadband only, since we may assume that those on slower connection speeds would be less likely to pay for content (due to slow speeds), this figure reduces to
  • Reuters run an annual survey which looks at willingness to pay for online news. Nordic countries lead the pack with numbers like 34%, whereas the US sits at 16%. Their generic average across several other countries is 11%.
  • It is possible to take all 38 countries in the Reuters survey, use their country household figures and internet penetration rate and then compare this against those who stated they were willing to pay for content to come up with a total TAM for news content subscribers. This is a valid method, as Reuters found that the vast majority of respondents were only willing to pay for one news source instead of multiple.
  • The streaming services total addressable market can be calculated by using the penetration rate for all internet households (fixed and mobile broadband), as mobile speeds grow as technology increases. The market potential for mobile-broadband international households outside of China is 575 million. We already know Netflix has 149 million US subscribers, with the potential there for more. Home broadband penetration is 84%, which means there are already more Netflix subscribers than US households. Countries like the US are likely outliers for Netflix, though, and most other geographies won't have more subscribers than households.
  • Globally, subscription-based video content has a penetration rate of 14.5%.