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OTT Could Grow to $12B Industry by 2018, Says Ooyala Report
While Netflix will continue to dominate, Ooyala sees plenty of opportunities for niche services in kids, anime, and sports video.

Ooyala and Vindicia co-published a report today on the future of the over-the-top (OTT) streaming video market in the United States, and the future is rosy. Getting out their crystal ball, they predict that OTT will grow from a $4 billion business in 2014 to a $8 billion to $12 billion business in 2018.

The report looks for the opportunities in that growth. It doesn't see any massive disruptions taking place in the near future: Netflix will continue to dominate the field, although its market share will diminish as competitors find an audience. What will emerge, however, is room for niche OTT services. It predicts that 15 to 20 specialized services will acquire 100,000 or more paying customers by 2018. Many other niche services will get by with smaller subscriber bases. Key areas for niche growth include sports, kids, anime, foreign shows and movies, ethnic content, and services created by a single celebrity, such as a politician or comedian.

The building blocks for OTT service success, including strong broadband, a large pool of connected devices, and simple payment systems, are all in place, the report says. They're all robust enough to power the next several years' growth. Factors that could help the industry grow faster include more public Wi-Fi; more tablets, set-top boxes, and connected TVs; improved interoperability; and some kind of standardization between client platforms. The crystal ball grows hazy about these topics, however: It's just too difficult to predict the rate of change for them.

Download "The Future of Premium OTT Services in the U.S." for free (registration required).

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