OTT Market Growing at 10% Worldwide, Totaling $51B in 2022
The over-the-top (OTT) video market will continue to grow at a brisk pace, forecasts ABI Research. Look for the worldwide OTT market to surge with a compound annual growth rate (CAGR) of 10 percent through 2022, at which time it will generate $51.4 billion.
The area will have 400 million subscribers by the end of 2018, and will continue to put pressure on traditional pay TV services. Subscribers enjoy the lower cost of OTT options, as well as the lack of long-term commitments. In North America and Europe, pay TV providers are adding OTT options to prevent customer churn. Some pay TV operators—including Dish Network and Sky—have created virtual multichannel video programming distributor (vMVPD) options, also known as skinny bundles, as a lower-cost path for subscribers.
Dish's Sling TV has over 2 million subscribers and DirecTV Now attracted 1.2 million subscribers in its first year, notes an ABI analyst. Pay TV providers are also fighting back by making more content available for on-demand viewing.
While OTT services cost less than pay TV, ABI notes that they deliver higher average revenue per user (ARPU) thanks to add-ons such as packages for live sports. ABI says the companies that stand out will do so with strong content libraries and excellent quality of service.
For more, ABI's report "Service Provider OTT Services and Set-Top Boxes Update" is available for purchase.
According to Convergence Research, OTT is growing at a faster rate than pay TV, but its lower average cost make it far less profitable.
The current wave of acquisitions and consolidation is all about going to market faster with new over-the-top services. That leaves smaller players scrambling.
VOD vendors haven't adapted to new workflow requirements and viewing habits, finds ABI.