OTT video revenue rockets


Over 60% growth in worldwide over the top video revenue in 2012

The over the top (OTT) video market has more than doubled in 2012, with more to come, stated new research.

Additionally, the continued spread of connected consumer electronics products and increasingly of mobile devices, are expected to push the OTT video market past $20 billion by 2015.

Companies like Netflix, Hulu, Apple, and Amazon helped drive the OTT video market past $8 billion in 2012, said ABI Research. The three largest markets – North America, Europe, and Asia-Pacific – experienced year on year growth in excess of 50% in 2012.

'The shift to digital and OTT distribution is accelerating, particularly as content providers increasingly warm up to these channels,' commented senior analyst at ABI Research, Michael Inouye. 'While pay TV services are still afforded many advantages, we are approaching the proverbial fork in the road when content owners will decide if they continue down the same path or forge ahead, shaking up the primary means of media distribution as we've known it.'

ABI said the dynamics around revenue generation continue to change and currently vary by region, such as subscriptions are more significant in North America than Europe or Asia-Pacific.

In time, however, ABI Research expects a greater diffusion of revenue across the various business models. For instance, in 2012 58% of OTT video revenue came from subscription service, but we anticipate this share to fall to less than 32% by 2018. In large part this is driven by a continual shift in consumer demand towards newer forms of digital content distribution.

'While we still see great value and strength in the pay TV sector we are also starting to see the pieces that will accelerate change fall into place,' added practice director at ABI Research, Sam Rosen. 'Whether it's Netflix expanding to international markets or ABC and CBS enhancing catch-up services the building blocks that will restructure the how, when, and where consumers view content, we are starting to give shape to a new media future. This future, however, isn't devoid of traditional media nor is it a matter of new channels necessarily winning, but rather a redistribution of wealth within the value chain.'


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