In markets such as North America and Europe, traditional pay-TV operators have jumped into the OTT market to improve subscriber churn by providing less costly video service. Can they compete with the innovative OTT providers? Is this already a lost cause?
According to Juniper Research, Subscription Video on Demand (SVoD) services — from leading providers such as Netflix and Amazon — will drive a surge in OTT revenues to reach $120 billion in 2022, and that’s up from $64 billion in 2017. In this environment, the traditional expensive bundle of pay-TV services will surely continue their decline.
Despite online TV rapidly growing in popularity, there’s no doubting the importance of the traditional TV set to the media consumption habits of internet users – even among those who are paying for an online TV service.
Over-the-top (OTT) video service usage has made steady progress in becoming a mainstream activity in France. This year, nearly half of the country’s internet users (49.7%) and 38.7% of the overall population will access streaming video services at least once a month, according to eMarketer’s most recent forecast of digital video usage in France.
Video entertainment has evolved. ABI Research evaluates expectations of the TV as a Service (TVaaS) business model, and finds that TVaaS revenues will grow from 10% in 2016 to 35% of video software revenues in 2021.
Source: ABI Research
In December 2016, according to comScore data, more than 49 million homes – 53 percent of U.S. Wi-Fi connected homes – accessed at least one OTT service. Moreover, these households were active in viewing OTT content, doing so an average of 19 separate days during the month, and for 2.2 hours per usage day.