Over-the-top content providers are successfully breaking into new consumer electronics devices, leading to a significant increase in transactions.
A new report from IMS Research suggests that in 2016, connected CE devices in the home will account for 27% of all OTT video transactions, up from 6% in 2010. One of the key drivers behind this growth is the geographic expansion of OTT service providers such as Netflix and Amazon.
Already Netflix has announced a launch in the UK and Ireland for early 2012, though it appears to hamstrung on any further moves outside its core territories. Rival Amazon is also building its OTT business and earlier this year acquired a majority stake in Lovefilm.
Anna Hunt, author of the recently published study “Over-the-Top Video – Service Delivery & Business Models – 2011 edition said, “Netflix’s aggressive pursuit of increasing the geographic reach of its OTT service illustrates to the need for OTT service providers to expand their serviceable target market if they want to grow revenues.” Many domestic markets are quickly becoming flooded with OTT service options.
IMS Research forecasts that by the end of 2016, over 133 million TV households worldwide will be accessing OTT content via their pay-TV set-top box.
Hunt adds, “OTT service providers will need to be flexible with their strategies once they expand into new markets, considering market dynamics such as broadband availability, competition and content licensing.”
She expressed concern that the Netflix offer in Latin America was quite limited when compared to its core market of the United States. Its success in Europe would be dependent on the availability of content.
