Report: OTT Revenues to Double in Western Europe

July 14, 2016 Kristin Brzoznowski Analysis, Top Stories
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LONDON: OTT TV and video revenues across Western Europe are expected to more than double between 2015 and 2021, according to Digital TV Research.

The Western Europe OTT TV & Video Forecasts report predicts OTT TV and video revenues in the region of $14.64 billion in 2021, up from $6.4 billion in 2015. Of the $8.25 billion in revenues to be added in that period, the U.K. will contribute $2.3 billion, Germany $1.34 billion, France $1.13 billion and Italy $0.99 billion.

SVOD will become the region’s largest OTT revenue source in 2018 before AVOD (advertising on OTT sites) regains the top spot in 2020. AVOD will bring in $5.79 billion by 2021, $3 billion up on 2015. The U.K. will supply $2.33 billion of the 2021 ad total, followed by Germany with $904 million. SVOD revenues will reach $5.63 billion by 2021, up from $2.1 billion in 2015. The U.K.—up by nearly $800 million between 2015 and 2021 to $1.51 billion—will remain the SVOD revenue leader, generating as much as second-placed Germany and third-placed France combined in 2021.

Simon Murray, principal analyst at Digital TV Research, said: “OTT adoption is already high in Scandinavia, the Netherlands and the U.K., but it has been much more muted in other countries such as France, Spain and Portugal.”

The report forecasts 53.71 million SVOD subscriptions by 2021, up from an expected 31.43 million by the end of 2016. Sweden will have more SVOD subscribers than Spain in 2021, despite only having a quarter of the population. The number of subscriptions are expected to quadruple in France and Italy between 2015 and 2021 and will grow eightfold in Spain.

Murray explained: “The Spanish SVOD sector is stifled as Telefonica provides its Yomvi SVOD platform free to its pay-TV subscribers. Yomvi is no longer offered as a standalone service. This also degrades the perceived value of the other SVOD platforms.”

He continued: “France’s relatively low take-up is harder to explain as there is a good selection of SVOD platforms on offer. However, government-imposed release windows dictate that SVOD platforms can only screen movies well after they have appeared on other platforms.”