Netflix has global mind-share, even though it’s officially available in only a handful of countries. The consumer awareness of the subscriber benefits are a testament to the apparent pent-up demand for affordable over-the-top (OTT) streaming video entertainment services.
The phenomenon of cord shaving, or consumers spending less on pay-TV, jumped from 26% last year to 35% in 2014. Now, more than half of consumers under 35 say they spend less on cable than they used to because they use internet video instead. The percentage of consumers who considered cancelling cable service has doubled since 2010 — from 15% to 30%.
via Altman Vilandrie
Over-the-top (OTT) pay-TV revenue is forecast to grow from $5.8 billion in 2014 to just over $10 billion in 2018. The global pay-TV market totaled $117 billion in the first half of 2014 (1H14), that’s an increase of 3.9% from the first half of 2013 (1H13). Pay-TV subscribers reached 837 million in 1H14, growing 10% over 2013, with the strongest growth again coming from the telco pay-TV segment.
Over-the-top (OTT) video-on-demand (VOD) services were almost imperceptible in Latin America until 2011, when just under half a million subscriptions existed among the most prominent economies in the region. Netflix arrived to the continent in September of that year and brought the OTT video-on-demand VOD market to life. The region is forecast to reach 17.09 million subscriptions to OTT VOD services by 2018.
Consumption of on-demand streaming video continues to grow in American homes, at the expense of broadcast TV viewership. According to the latest market study by Parks Associates, the average U.S. broadband household now watches more than 17 hours of non-linear video per week, compared to 11.5 hours of linear video.
What happened to the legacy video entertainment market in America, and why has HBO announced that they will — for the first time — choose to bypass the traditional pay-TV distribution channel to reach new customers?
American telcos AT&T and Verizon added nearly a third of a million television subscribers in the third quarter of 2014. Between them they have 11.58 million video customers, up by 1.16 million over twelve months. However, the gains of the two telcos appear to come at the expense of other pay-TV service providers.