OTT Revenues Up 60 Percent

SCOTTSDALE: The over-the-top video market worldwide hit revenues of $8 billion in 2012, a 60-percent-plus gain, according to new findings by ABI Research.

The three largest markets, North America, Europe and the Asia Pacific, saw OTT revenues gain by more than 50 percent. By 2015, ABI projects revenues to top the $20 billion mark, thanks to the continued spread of connected devices. ABI also found that last year, 58 percent of OTT revenues came from subscription services; this is expected to drop to less than 32 percent by 2018.

“The shift to digital and OTT distribution is accelerating, particularly as content providers increasingly warm up to these channels,” said senior analyst Michael Inouye. “While pay-TV services are still afforded many advantages, we are approaching the proverbial fork in the road when content owners will decide if they continue down the same path or forge ahead, shaking up the primary means of media distribution as we’ve known it.”

Sam Rosen, practice director at ABI, added, “While we still see great value and strength in the pay-TV sector we are also starting to see the pieces that will accelerate change fall into place. Whether it’s Netflix expanding to international markets or ABC and CBS enhancing catch-up services, the building blocks that will restructure the how, when, and where consumers view content are starting to give shape to a new media future. This future, however, isn’t devoid of traditional media nor is it a matter of new channels necessarily winning, but rather a redistribution of wealth within the value chain.”