Over-the-top (OTT) media service is a streaming media service offered directly to viewers via the internet. The term OTT content is synonymous with subscription-based video-on-demand (SVoD) services that offer access to film and television content. AVOD is an advertisement based revenue model. Here, the users don’t need to pay any amount. It gives its users free content to watch online which also contains commercials or advertisements. Transactional VOD lets its users pay only for the content they watch. TVOD is of two types: electronic sell-through (EST) and download to rent (DTR).
The global OTT content market is expected to surpass US$ 276.2 Bn in terms of value by the end of 2028.
Increasing mobile subscription and adoption of mobile-connected devices, especially smartphones is expected to propel the global OTT content market growth over the forecast period. Mobile devices such as smartphones and tablets are gaining significant traction and become the go-to device for communications and content consumption. This can be attributed to the rapid adoption of 4G services in developed as well as emerging economies. Although high-speed internet is expensive, constant R&D activities and intense competition are expected to minimize the price in the near future. Hence, these factors are expected to drive growth of the global OTT content market growth in the near future. According to statistics of ITU, the number of mobile Internet connections increased from around 200¬ million in 2008 to 2.2 billion by 2013. According to the same source, by the end of 2015, there are over 7 billion mobile cellular subscriptions, corresponding to a penetration rate of 97%, up from 738 million in 2000.
With OTT services such as VoD, text messengers, VoIP, and other catch-up services already covering a vast subscriber base in developed economies, live OTT service offerings can open up potential revenue opportunities for existing as well as new players in the OTT content space. These live OTT service offerings include event-based live delivery, awards functions, concerts, and sporting events. As a result of this, major DTH operators are focused on launching TV everywhere apps on mobile platforms, in order to capitalize on this opportunity. Through this, subscribers can watch live TV anywhere either free or for an additional monthly fee. While there are several players along the OTT value chain that have launched apps for live OTT services for the surging subscriber base, DTH operators can have a key advantage in monetizing these viewers due to their existing payment relationships.
Global OTT Content Market: Recent Developments
In November 2019, Akamai Technologies has completed the acquisition of Exceda. This acquisition will help Akamai Technologies, in selling Akamai’s portfolio in Latin America region.
In March 2020, Viacom18 has launched Voot Select, the company’s new foray into the subscription video on demand (sVoD) services. This platform will contain more than 30 original and global content, through their partnership with many international studios.
In September 2021, Ukraine’s Star Media has entered into a partnership with OTTera, an US based company launch an OTT services in Ukraine.
Key players in the market are focused on partnerships and collaborations, in order to gain a competitive edge in the market. For instance, in September 2019, Microsoft Corporation partnered with AltBalaji to allow digital SVoD platform’s subscribers to use Microsoft’s BlendNet technology to download and access AltBalaji’s content without consuming large amounts of cellular data.
Presence of poor internet infrastructure in emerging economies is expected to hamper the global OTT content market growth over the forecast period. The current internet infrastructure in India is no adequate with intermittent internet speeds. This, in turn, hinders providers’ ability to offer ubiquitous internet connectivity to users. India currently has an average connection speed of 2.8 Mbps, which is relatively low when compared to the global average connection speed, which is 5.6 Mbps.
Global OTT Content Market - Impact of Coronavirus (Covid-19) Pandemic
Unlike other markets, the global OTT content market has gained significant traction the COVID-19 pandemic. Since the outbreak, many countries implemented lockdown policies, in order to curb the spread of virus, compelling people to stay at home. Besides, numerous private organizations adopted work-from-home policies. As people were mandated to stay at home, OTT services become major source of entertainment. Many OTT platforms started providing lucrative offers, to expand their consumer base. Key OTT platforms such as Netflix, Amazon Prime Video, Disney+, HBO Max, and more witnessed significant growth in their subscribers during the COVID-19 pandemic. These streaming services can be accessed via smartphone, tablet, laptops, and smart TVs, which has made them popular among consumers.
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The entrance of leading OTT players such as Netflix and wuaki.tv (in 2014) in the European VoD markets has accelerated the adoption of the VoD services. Furthermore, to sustain in this changing market scenario, traditional cable TV providers including Sky UK Limited, Sky Deutschland AG and Canal+ (which are now part of UK's Sky plc.) launched their standalone offers (Now TV, Sky Snap, Canal Play respectively), which are now part of Sky plc.
Economies of Asia Pacific including China and India are consistently witnessing increasing Y-o-Y growth in the adoption of smartphones, tablets, and other connected devices. Moreover, leading OTT service providers are introducing services at competitive prices after understanding the price sensitivity demographics of the region. According to Coherent Market Insights’ analysis, around 55% of smartphone subscriptions added during 2015–2020 will be from the Asia Pacific region. As per the GSMA Mobile India Report 2015, the number of smartphone users is expected to increase from 180 million in 2015 to 690 million by the end of 2020.
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.
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