by P.J. Bednarski , Staff Writer @pjbtweet, May 26, 2016

“Last one in is a rotten egg,” goes the old yell that rings in the ears of anybody near a swimming pool and a bunch of a kids. A new report from Strategy Analytics says it may also apply to the video streaming market.

It reports that U.S consumers this year will spend $6.62 billion on video streaming services, like Netflix, Amazon, Hulu (and Fullscreen and YouTube Red and HBO Now and . . . ) and that’s $1.19 billion more than just the year before, or 22%.

But . . .

But 2016 will be the first year the percentage increase is less than the years before it. That’s a sign the market is reaching a saturation point.

I’d say a piddling 22% increase is still no reason to panic, but Michael Goodman, Strategy Analytics digital media director, wins the First Alarm award on this budding market change. “Although the change in increase is relatively small, its direction is extremely significant,” he wrote. “It shows that, whilst actual market saturation is a few years off yet, the domestic U.S. streaming subscription market is now on the backside of the adoption curve.”

advertisement advertisement

DVDs and downloads, to buy or rent, seem to be the victims here. They’re going down while pay streamers are gaining.

For now. It’s all downhill from here for them, it would seem, at least to Goodman.

At some point, it does seem that new entrants to the pay streaming business are going to have a tough go of it. As a lot of people have noted, after consumers count up the number of $6.99 payments they’re making every month they might start wondering if they really need to pay for things like Seeso, the comedy streamer NBC operates.

We may be reaching the point that more people might start making that calculation.

Goodman says 60% of all U.S. households now get Netflix, and in broadband homes, that figure jumps to 85%., and he says Netflix tops all other competitors, owning 53% of all subscriptions, more than doubling Amazon’s 25% and stomping all over Hulu’s 13%. Goodman theorizes that Netflix is nearly topped out, and for all others, the idea is to either take market share from a competitor or convince viewers to buy more than one.

Amazon, for example, now allows would-be users to buy on a monthly basis rather than fork up the annual fee, which is a good way to lessen the sting of subscription costs. And it seems all players are looking to foreign turf to build revenue.

You wonder how Strategy Analytics’ figures hold up if more and better skinny bundles become available. In theory, at least, if I can reduce a cable bill by half that creates a larger pool of money for pay streamers to grab. I’m also a little lonely voice on this, but the growth of SVOD streamers still seems to leave opportunity for well-heeled advertising-supported streaming services to invent a palatable way for viewers to pay less and soldier though some commercial messages that could be rare, brief and because it’s possible, even kind of relevant.

Oddly, the only places seeming to be interested in really re-adjusting the ad model are TV outlets. Fox, Time Warner and Viacom are all experimenting with new, fewer-ad formula. And NBC’s “Saturday Night Live” will cut its commercial load to avoid losing viewers who don’t the commercial intrusions very funny at all.

pj@mediapost.com