Over-the-top (OTT) content is the delivery of audio, video, images, and other media over the Internet. OTT services are majorly related to communication & media and can be consumed at a lower cost than the traditional method of delivery. OTT content, services, and applications are being increasingly adopted in all segments of commerce and society. Consumers can avail video online instead of conventional television, online communications platform instead of traditional telephone services can download music and films that were once provided on physical media. Online video streaming service provides video content like TV shows and movies delivered through internet across different types of devices such as smartphones, tablets, desktops, laptops, and TVs.
The global OTT content market is estimated to be valued at US$ 101.2 billion in 2021 and is expected to exhibit a CAGR of 14.5 % over the forecast period (2021-2028).
In September 2021, Akamai Technologies, Inc, has launched, Learn Akamai, free on-demand learning platform that can help customers in achieving full value of Akamai solutions, easily.
In September 2020, Limelight Networks, Inc, enters into a partnership with SimulTV, to deliver more than 130 live, online channels worldwide.
In July 2021, Kerala government has announced to launch to launch their own over-the-top (OTT) platform. The state government has planning to launch this platform by November 1, 2021.
Figure 1. Global OTT Content Market Value (US$ Bn), by Region, 2020
North America held dominant position in the global OTT content market in 2020, accounting for 37.9% share in terms of Value, followed by APEJ and Western Europe, respectively.
Global OTT Content Market - Drivers
Growing penetration of high-speed broadband is expected to drive growth of the global OTT content market during the forecast period. The proliferation of high-speed internet has increased in the recent past. Easy access to high fidelity data networks with consistent speeds of 2-3 Mbps facilitates a buffer-free experience to users. According to Internet live stats in 2015, household broadband penetration in the U.S. was around 80%. Furthermore, Western economies such as France, Germany, and the U.K. are expected to witness similar penetration with emerging economies expected to reflect a stronger growth rate in the near future. According to Coherent Market Insights’ analysis, global broadband penetration was up from ~29% in 2010 to ~44% in 2015 and is expected to reach ~47% by 2016 end. According to the same source, 3G mobile broadband coverage is also extending rapidly, with global penetration increasing to 69% in 2015 from 45% in 2011.
Availability of new and advanced features in the smartphone is expected to propel the global OTT content market growth over the forecast period. Smartphone manufacturers are introducing novel and advanced features in smartphones, in order to cater to rising demand from consumers for a personalized experience. These features include an integrated camera, 4G LTE connectivity, powerful microprocessors, integrated sensors, and high battery autonomy. Furthermore, changing the social lifestyle of modern consumers where they consume a vast volume of videos, audio files, and data is expected to propel the global OTT content market growth over the forecast period.
Global OTT Content Market Opportunities
Mobile broadband is expected to boost mobile data revenues in the near future, owing to high growth mobile messaging and value-added services (VAS). This, in turn, will create potential opportunities for OTT service providers, especially in markets where mobile broadband penetration is low. In emerging markets, witnessing a surge in the penetration of smartphones and mobile data services, lowering data plan prices can play a crucial role in the expansion of the subscriber base. Moreover, more flexible and creative options for users to consume and pay for data usage can prove to be profitable.
Consumers are gradually preferring long-form video content with average bitrate per user increasing. Internet service providers are compelled to provide high-speed internet at reduced prices, in order to cater to increasing demand and at the same time remain competitive in the highly competitive Indian market. In India, the average page load time for a broadband connection is 3.9 seconds and for mobile it is 6.9 seconds. This is expected to reduce further, creating room for more video content viewing.
|Base Year:||2020||Market Size in 2021:||US$ 101.2 Bn|
|Historical Data for:||2017 to 2020||Forecast Period:||2021 to 2028|
|Forecast Period 2021 to 2028 CAGR:||14.5%||2021 Value Projection:||US$ 276.2 Bn|
Akamai Technologies, Apple Inc., Google Inc., LeEco, Netflix, Microsoft Corporation, Amazon, Inc., Facebook, Inc., IBM Corporation, and Limelight Networks
|Restraints & Challenges:||
The market has witnessed the introduction of few third-party mobile applications providing innovative OTT content (VoD) features, owing to proliferation in demand for streaming video services (offering diverse content). Some popular mobile apps offering these services include Meerkat (Life On Air, Inc.), which enables users to broadcast live video streams via an iPhone through their Twitter account. Pickup (Pikdip Inc.), a subscription service offers a library of diverse ethnic entertainment. This was in line with increasing demand for greater diversity in the media content from consumers.
Key emerging economies in Latin America such as Mexico, Brazil, and Argentina have been recorded to account for highest volumes of mobile data traffic among all other emerging markets, which is, in turn, creating potential opportunities for OTT service providers such as Netflix and YouTube to maintain a competitive edge in these regions. According to Coherent Market Insights’ analysis, Latin America accounted for a total of 8.9 million 4G connections, with a vast majority being in Brazil, Mexico, and Argentina. Furthermore, according to the Cisco Visual Networking Index white paper 2015, mobile data traffic in the region was recorded at 200,900 TBs in 2014.
Figure 2. Global OTT Content Market Share, By Revenue Model, 2020
Key Takeaways of the Graph:
Global OTT Content Market - Restraints
Presence of low bandwidth in emerging economies is expected to restrain growth of the global OTT content market during the forecast period. The quality of video streaming mainly depends upon bandwidth of the internet network. Presence of low bandwidth lowers the user experience, owing to interruption during video and audio streaming. Moreover, a decline in download speeds, longer time for streaming videos are some of the other issues faced due to low bandwidth. For instance, most countries in Southeast Asia have an average connection speed of less than 10 Mbps; India (2.5 Mbps), the Philippines (2.8 Mbps), Indonesia (3 Mbps), and China (3.7 Mbps). Only some countries in the region have average speeds exceeding 10Mbps. These include Singapore (12.9 Mbps) Japan (15 Mbps) and South Korea (20.5 Mbps).
Challenges regarding online piracy are expected to hinder the global OTT content market growth over the forecast period. Online piracy is one of the common issues faced by OTT content providers, especially in India. Since Indian OTT content providers generate large volumes of traffic through live streaming programs of Indian TV channels, the issues reading piracy of content remains a major challenge for OTT content providers. While piracy of packaged media (physical piracy) has declined in recent years, online piracy continues to increase. However, with the increased availability of high-speed data and users accessing legitimate OTT content, over a period of time the impact of piracy in the OTT space is expected to decrease.
Key players operating in the global OTT content market are Akamai Technologies, Apple Inc., Google Inc., LeEco, Netflix, Microsoft Corporation, Amazon, Inc., Facebook, Inc., IBM Corporation, and Limelight Networks.
An over-the-line content delivery network (CDN) is a broadband internet service available directly to users through the Internet. OTT bypasses traditional cable, satellite, and radio stations, the kinds of businesses that used to be distributors or controllers of these media. CDN technology distributes large quantities of IP content over large distances, saving users money on traditional media costs and opening the door to a new world of online entertainment. OTT software developers and marketers can now "rent" space on CDN networks for streaming video, audio, and multimedia files and have it all delivered wirelessly over the Internet to any user with an Internet connection. Companies and organizations ranging from private citizens to international corporations are realizing that it is easier and more cost-effective to create a website for the purpose of delivering videos, music, images, and other media to consumers over the Internet rather than for them to visit a physical location where they can rent a television set or pay for satellite or cable television.
Increasing adoption of subscription video on demand (SVOD) in emerging markets is expected to boost the global OTT content market growth over the forecast period. Emerging economies India, China, and Indonesia have witnessed significant growth in the adoption of SVOD platforms with rising penetration of smartphones and high-speed internet at competitive prices. With streaming companies offering lucrative subscription services, consumers are gradually shifting from conventional television to SVOD. Hence, such factors are expected to boost the global OTT content market growth over the forecast period.
The ongoing shift towards commoditization of sporting & entertainment services is expected to accelerate growth of the global OTT content market in the near future.
Key features of the study:
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