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OTT Video Revenue to Top $40 Billion by 2020

24 Sep, 2014 By: Erik Gruenwedel

Subscription streaming revenue will account for 40% of the total, up from 27% in 2010

Streaming video is all the rage in the media and on Wall Street. Global online TV and video revenue (over fixed broadband networks for 51 countries) will reach $42.3 billion in 2020, up from $3.9 billion in 2010 and the $19 billion projected in 2014, according to a new data from Digital TV Research.

While the United States remains the dominant OTT video country for revenue, its share of total global revenue will drop from 59% in 2010 (when it recorded revenue of $2.3 billion) to 37% in 2020 ($15.5 billion) as the international markets catch up. China’s OTT revenue will soar from just $37 million in 2010 to $3 billion in 2020 — to push China up to third place in the world rankings (with Japan in second place).

Online TV and video advertising — not SVOD — are the key drivers for the OTT sector, with revenue of $8.3 billion expected in 2014, up from $2.4 billion in 2010. Rapid advertising expenditure growth will continue, to reach a global total of $18.1 billion in 2020.

Subscription streaming revenue from services such as Netflix, Amazon Prime Instant Video and Hulu Plus will climb from $1 billion in 2010 to $7.6 billion in 2014 and onto $16.7 billion in 2020. This means that SVOD will contribute 40% of total OTT revenue in 2020, up from 27% in 2010, according to Digital TV Research.

The U.S. generated SVOD revenue of $793 million in 2010, or 75% of the global total. Although its revenue share will climb by 667% to $6 billion, the U.S. will only account for 36% of the 2020 total.

Meanwhile, transactional VOD revenue will grow from $197 million in 2010 to $2.8 billion in 2020. Electronic sellthrough revenue is projected to reach $4.6 billion in 2020, up from $332 million in 2010.

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