Availability of high speed broadband has propelled the Over-the-Top (OTT) content adoption globally. The ease of access to high fidelity data networks, with consistent speeds of 5–6 Mbps that enable buffer-free experience to users, are factors driving higher adoption of OTT content services. In 2015, household broadband penetration in U.S. was around 80%. Other countries such as Germany, France, U.K., are expected to achieve a similar penetration, while most emerging economies are anticipated to reflect even stronger growth rate over the next decade.
The OTT content includes voice over IP (VoIP), text and image messages, music streaming, and video streaming. Out of all these, video streaming occupies the largest share of the market which is accessed by the users through their mobile devices, smart TVs, desktops and laptops, OTT streaming devices, and gaming consoles.
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OTT content providers deliver this service using basically three types of revenue models, subscription-based services (SVOD), free and ad-supported services (AVOD), and transactional services (TVOD). When the provider delivers OTT content through SVOD, then the user can access the content by paying a flat monthly fee or subscribing for the content. An example of SVOD is Amazon Prime. AVOD is free to view service, where the OTT content provider basically earns by putting advertisements in the content. However, here the user don’t need to pay anything. And lastly, there is TVOD which includes pay-per-view (PPV) and download-to-own (DTO) models.
OTT content market is currently witnessing a trend of providing original content to the viewers. For instance, Netflix, the pioneer of OTT content service, is producing and broadcasting its own series. Some of its famous series include Narcos and Stranger Things. Some of the companies are also focusing on delivering regional language content to its viewers in order to expand their reach. For instance, in India, Spuul provides a huge library of TV shows and movies in Hindi as well as regional language.
Global OTT Content Market: Drivers and Restraints
Increased growth of mobile connected devices and connections especially via smartphones is also one of the important drivers of the OTT content market. Mobile devices such as smartphones and tablets are increasingly becoming the first go-to device for communications and content consumption. Additionally, with developing economies leapfrog to 4G and more advanced technologies, enabling smartphone users to access the internet more easily, mobile internet diffusion is expected to accelerate in coming years.
Further, attractive pricing and more content options are also driving the demand for OTT content. Major reasons for this increasing preference towards OTT content are - expanding content libraries and affordability relative to traditional TV subscriptions.
However, the piracy issues in some of the developing countries limits the monetization opportunities available for the OTT providers, hence acting as a deterrent for the OTT content market. Countries such as India and China have vibrant content production industries, but the monetization opportunities related to content are restrained by rampant piracy rates.
Video streaming is totally dependent on bandwidth of internet network. Therefore, low bandwidth worsens user’s experience due to the interruption in streaming video and songs. Additionally, decrease in the download speed, high time consumption for streaming video are some of the issues faced by user due to low bandwidth which pose challenge for the OTT content market.
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Global OTT Content Market: Market Segmentation
Segmentation on basis of Content type:
The major segments in content type in OTT content market include:
Voice over IP (audio)
Text and Images
Music Streaming
Video
Entertainment and Infotainment
Food, Travel and Fashion
Gaming and Spiritual Content
Sports & Live Content
Segmentation on basis of Revenue Model:
The major segments in revenue model in OTT content market include:
SVOD (subscription-based services)
AVOD (free and ad-supported services)
TVOD (transactional services)
Others (User generated, TV Everywhere and Linear OTT)
Segmentation on basis of Device/Platform Type:
The major segments in device/platform Type in OTT content market include:
Desktop and laptop computers
Gaming consoles
OTT Streaming Devices
Smartphones and tablets
Smart TVs
Others (such as Blue Ray Devices)
Segmentation on basis of Regions:
The major segments by regions in OTT content market include:
North America
Latin America
Western Europe
Eastern Europe
Asia Pacific (excluding Japan)
Japan
Middle East & Africa
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Global OTT Content Market: Key Players
Some of the prominent players in the OTT Content market include: Akamai Technologies, Amazon, Apple, Inc., Facebook, Inc., Google, Inc., IBM Corporation (Ustream), Microsoft Corporation, Netflix, Leshi Internet Information and Technology (LeEco), and Limelight Networks, Inc.
