The Global OTT Gold Rush is on
The global OTT video services marketplace continues its rapid rate of change, impacting the video ecosystem across world markets. According to the Global OTT TV & Video Forecast report from Digital TV Research global OTT TV and video revenues will reach $51.1 billion in 2020; a massive increase from the $4.2 billion recorded in 2010 and the $26.0 billion expected in 2015.
According to the report, the US will remain the dominant territory – with OTT TV and video revenues rising by $16.6 billion between 2010 and 2020 to $19.1 billion. China’s OTT TV and video revenues will rocket from just $40 million in 2010 to $2,815 million in 2020 – to push China up to fourth place in the world rankings. OTT revenues will exceed $1 billion in 11 countries by 2020.
SVOD will become the largest revenue source in 2020, overtaking OTT advertising. SVOD will add $14 billion between 2014 and 2020, with advertising on OTT sites up by nearly $12 billion.
The report forecasts 249 million SVOD [subscription video on demand] homes by 2020, up from 20 million in 2010 and an expected 117 million by end-2015. The US will contribute 70 million SVOD homes to the 2020 total.
SVOD revenues will soar from $1.0 billion in 2010 to $7.6 billion in 2014 and onto $21.6 billion in 2020. The US generated SVOD revenues of $753 million in 2010. Its revenues will climb by 765% to $6,516 million in 2020.
Simon Murray, Principal Analyst at Digital TV Research, said: “SVOD has developed even faster than we expected in our last edition a year ago. Some of this growth was spurred by Netflix’s aim to establish operations in 200 countries by end-2016. Not only has the launch of Netflix boosted each market, but the anticipation of its launch has galvanized local players into action – creating a whirlwind of promotional activity.”
Netflix’s international operations are growing fast. Digital TV Research expects its international paying subscribers to grow to 26.36 million by end-2015. We also expect that its US paying SVOD subs will reach 43.54 million by end-2015, giving a global total of 69.90 million.
According to the latest industry research from Parks Associates, 58 percent of US broadband households subscribe to an OTT video service. Among European broadband households, 57 percent in the UK, 29 percent in Spain and 24 percent in Germany subscribe to an OTT service. Also, in 2015, approximately seven percent of all US households, or 8.4 million households, subscribe to broadband and at least one OTT video service but do not subscribe to pay-TV. This figure includes consumers who have discontinued pay-TV service and those who have never subscribed to pay-TV.
In other Western nations, this same figure is approximately 4 percent or less among all households. Operators are introducing their own OTT services to appeal to consumers who are not currently taking pay-TV.