OTT rental revenue to surpass pay TV

Over-the-top (OTT) revenue is set to quadruple to $32 billion, up from the expected $8.2 billion in 2012, according to ABI Research.

Subscription services, such as Netflix, have led the OTT markets the past couple of years, which has helped push the market towards healthy growth. By 2014, however, the company expects OTT rentals to surpass subscription revenues.

Practice director Sam Rosen commented, “Connected CE and mobile devices continue to push consumer behavior towards newer forms of media distribution like OTT and multiscreen services. Pay TV services will continue to thrive, by implementing multiscreen services and supporting OTT content. In the end we expect an amalgamation of services that complement each other for many consumers.”

In time, advertising, like OTT rentals, is expected to pick up momentum as ad dollars increasingly shift to the OTT market. Connected CE and mobile/portable devices in particular present additional consumer touchpoints and enable more creative ways to connect or interact with consumers.

These devices are capturing more of our attention as many consumers claim to multitask while watching TV. Finding new ways to better engage consumers through OTT experiences, therefore, will prove increasingly important as consumers adopt new viewing behaviors.

Senior analyst Michael Inouye added, “While many consumers today claim to use mobile and portable devices while watching TV, most of us are in actuality poor at multitasking. In many cases this means consumers are more acutely aware about the content on their portable device than the TV. While second screen advertising is not necessarily OTT content it does speak to the importance of targeting these connected devices that extend the reach of content beyond the TV.”