Pyramid Research: OTT Players Need Local Focus for European Success

ADVERTISEMENT

BOSTON: New insight from Pyramid Research points to robust growth for the OTT video market in Europe, where global players are urged to “focus on domestic content and local languages” to increase the uptake of their services and revenue.

The OTT Video in Europe: Focus on Domestic Content and Local Languages to Boost Take Up of Services report states that an increasing consumer appetite for VOD services presents an opportunity for European telco operators to complement their core portfolio of services and add new revenue streams.

Stephanie Char, Western Europe analyst at Pyramid Research, said, “European markets offer a favorable environment for OTT adoption due to high fixed and mobile broadband penetration rates, high proliferation of connected devices, greater volume of online video catalogs and increasing pay-TV penetration, which will reach 73 percent of households in Central and Eastern Europe (CEE) and 69 percent in Western Europe (WE) by 2020.”

According to Pyramid Research’s Digital Consumer Analyzer, the adoption of subscription-based OTT video and VOD services has grown steadily in the U.K. over the last two years, reaching 37 percent and 23 percent of pay-TV users, respectively, in Q2 2016. Global platforms Netflix and Amazon Prime are playing an important role in driving the adoption of OTT video services. U.K. consumers show a clear preference for Amazon Prime and Netflix video services as providers of the most desired content bundled with mobile services, with scores of 27 percent and 18 percent for smartphone users and 29 percent and 20 percent for tablet users, respectively.

Char commented, “The OTT video market in Europe is likely to witness robust growth, owing to strong interest from customers in content and OTT players’ investments in content and platforms. LTE service adoption will play an important role in driving OTT video adoption across Europe. Pyramid Research expects 4G connections to reach 66 percent of total SIM cards in WE and 29 percent in CEE by 2020.

“OTT players should focus on domestic content and local languages to boost the uptake of their services and revenue. Content is vital to any successful paid video service. However, linguistic diversity in the European markets has posed a challenge to OTT service providers. The lack of availability of foreign content in local languages limits market penetration for international OTT players.

“Netflix, however, has started to combat this by producing original content in local languages, such as the TV series Marseille in France, and will launch similar content in Germany and Spain starting in late 2016. For EU member countries, the EU encourages OTT providers to include at least 20 percent European content in their catalogs.”