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Research: OTT Video Market to Reach $10.7 Billion This Year

7 Aug, 2014 By: Erik Gruenwedel

OTT video

Netflix is distancing itself far ahead of the competition

Give consumers unlimited online access to original programming, TV shows and recent movies for $9 a month and you’ve got a market driver — and winner.

That’s the finding of a new Strategy Analytics report that projects the North American over-the-top video market will grow 21% this year to $10.7 billion in revenue. Revenue is forecast to double between 2013 and 2019 to $18 billion. Of course, North America is home to OTT video market leaders Netflix, Amazon Prime Instant Video and Hulu Plus.

“Barring a totally unexpected collapse, Netflix has won the battle for supremacy in this sector, accounting for about three-quarters of [SVOD] revenue in North America,” Michael Goodman, director, digital media for Strategy Analytics, said in a statement. “With its momentum only growing, the other services, such as Hulu, HBO Go, YouTube and Amazon, are left to fight over the scraps.”

Indeed, SVOD is projected to account for 48% of all OTT revenue this year, followed by ad-supported video, EST and transactional VOD.

The average North American broadband user will spend almost $29 on OTT services in 2014, up 18% from 2013. By 2019, this will have increased 78% from 2013 to $43.51, according to Strategy Analytics.

Between 2013 and 2019, SVOD revenue will grow 116% to $8.8 billion. Electronic sellthrough will grow 58% to $1.9 billion, while transactional VOD will grow 74% to $980 million. Ad-supported video revenue will increase 109% to $6.4 billion.

"It’s amazing to think people spent almost half as much on Internet film and TV content last year as they did on DVDs — a format that's been around for 20 years,” Goodman said. “By the end of this year there’ll be about 54 million subscriptions to OTT video services such as Netflix, Hulu and MLB.com. In five years this will reach about 69 million — at which point OTT revenue will have overtaken DVD."


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