The over-the-top (OTT) video market will break through the $200 billion barrier by 2024 with 90% of revenues coming from subscription and advertising revenue.
ABI Research says new services like Disney+ and Apple TV+, coupled with aggressive pricing and packaging, and continued expansion by incumbents are helping increase the sector’s take.
Subscriptions in the Asia-Pacific region have grown significantly, driven by key services in China, such as iQIYI/Baidu, Tencent, Youku Tudou/Alibaba Group and increasing opportunities in India.
“Cord-cutting is often regarded as a consequence of expanding OTT consumption, but the market dynamics are more complex, particularly when one considers how the pay TV industry has embraced OTT as a complement and value-additive, rather than strict competition. Over time, we expect the traditional pay TV offer to continue to evolve and become indistinguishable from a pure OTT package of services,” comments Michael Inouye, Principal Analyst, ABI Research.
Even with over 700 million OTT SVOD subscriptions in 2019, the pay TV market, with over 1 billion subscriptions, is still larger. And, while growth rates are slower (and declining in North America), the overall market is still expanding. The attention paid to low latency video is testament to how OTT video is growing but also highlights the ongoing opportunities with live/linear programming.
“Increasingly, we’re seeing more solutions and conversations about bringing content and services together. This includes pay TV and OTT bundles and extends to cross-platform advertising, analytics, and customer/service management. Ultimately it makes the market more accessible to a wider range of companies and expands the potential video touchpoints, particularly as new technologies like 5G, smart home, and Augmented/Virtual Reality play larger roles,” Inouye concludes.