OTT TV Revenues explosion forecasted

New research shows that TV homes with broadband are increasingly signing onto over-the-top TV (OTT) service — with and without traditional pay TV services.

In the U.S., 57% of current traditional pay TV providers have an OTT video service, while 7% (8.4 million U.S. homes) have an OTT service but no pay TV services, according to Parks Associates. This last number includes consumers who have discontinued pay TV service and those who have never subscribed to pay TV.

Globally, Parks says revenue from OTT service will more than double in four years, reaching $19 billion in 2019 from $9 billion in 2014. This is supported by data unveiled by analysis firm Digital TV Research, who have projected a doubling in global OTT video streaming revenues from $26bn in 2015 to $51.1bn in 2020; highlighting the growing market share of OTT players in broadcasting.

Other countries are a bit behind U.S. consumers — but growing. In the U.K., 57% of pay TV homes with broadband have at least one OTT service, while Spain has 29% of pay TV homes with broadband that have an OTT service, and in Germany, the percentage is 24%.

In the U.K., Spain, and Canada, 4% of TV consumers’ homes with broadband have an OTT service, but no traditional pay TV package; Germany is at 2%. Traditional pay TV providers have tried to compete with OTT with their own TV Everywhere efforts — putting their traditional TV content on new mobile apps and other non-traditional platforms.

But Brett Sappington, director of research for Parks Associates, says this hasn’t worked. “While operator attempts at TV Everywhere have made little impact, OTT video services are experiencing a boom.”

OTT video revenue explosion forecasted

The newly released report from Digital TV Research forecasts subscription-based video on demand services will grow to become the primary source of revenue generation, ahead of advertising, with projected global revenues rising from $9.9bn to $21.7bn by 2020. Advertising, meanwhile, will grow to reach $21bn from $11.4bn today.

Contributing to the global growth in VOD subscriptions, the US market will grow to 70 million by 2020, representing 28.1% of the global market.  In 2010, the US generated subscription revenues of $753 million; Digital TV Research reckons that number will grow by 765% by 2020, to $6.52bn.

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