European OTT Video Market to Reach $9.45 Billion by 2018

BOSTON: OTT video revenue in Europe was up 51 percent last year, reaching $3.2 billion, and is forecast to grow a further 43 percent this year, according to Strategy Analytics.

The 2014 European OTT Video Market Forecast predicts that the majority of this growth will come from within the online SVOD and ad-supported video business models. This should lift the market above $9.45 billion by the end of 2018.

With Netflix leading the way, SVOD revenues experienced strong growth during 2013, up 133 percent. This is expected to nearly double by the end of 2014.

Ad-supported video makes up more than 60 percent of the total OTT video revenue in Central and Eastern Europe. However, it will represent less than 50 percent of Western Europe OTT video revenue by the end of the year. The average OTT video spend per broadband user in Western Europe is about four times that of those in CEE.

The growth of OTT video suggests that the audience is shifting towards accessibility and availability over actual ownership of home videos. “Over time, consumers will shift from content ownership to lower cost means of consuming media. As long as OTT services providers continue to offer attractive video catalogues at a reasonable price, accessibility and availability will trump ownership,” said Leika Kawasaki, digital media analyst. “The success or failure of OTT video services is heavily dependent on the quality of their content library. The expansion of global players like Netflix across Europe has been slowed due to complex content negotiation impacting the quantity and quality of available content in the region.”

“Broadband expansion, proliferation of connected devices, and easy access to extensive online video catalogues have proven a potent combination in driving adoption of OTT video,” added Kawasaki.