Adults in the U.S. will spend an average of 5 hours and 31 minutes watching video each day this year, according to eMarketer, and digital video viewing across devices is driving growth — especially via smartphones and media tablets.
Revenue from OTT television program advertising — that is, commercial advertising placed in full-length TV-quality programming delivered via broadband — is expected to grow nearly four fold between 2015 and 2020, according to TDG.
With the growing popularity of independent OTT services, such as Netflix and HBO Go, customers are starting to demand a similar experience from their pay-TV subscriptions — including features such as content search, recommendations and mobile device support.
Although AT&T and Verizon currently rank fifth and sixth among pay-TV operators in the U.S. in terms of subscribers, their total company revenues far exceed those of their competitors. Between them they reported total revenues of $67.6 billion for the last quarter of 2014.
The installed base of U.S. connected TV sets reached 22 million in Q4 2014 — that’s up from 13 million in Q4 2013. The number of connected TVs now exceed that of Blu-ray disc players, which had an installed base of 20 million units in Q4 2014.
Traditional forms of video entertainment are already saturated in most of the developed nations around the globe. Meanwhile, some of the more promising emerging markets are growing at a more gradual rate than was anticipated, due to current economic pressures.
As the U.S. economy perseveres from recession to potential resurgence, consumers continue to power a growth in subscription-based video on-demand (SVOD) services — such as Netflix, Hulu and Amazon Prime. According to Nielsen, 41% of U.S. homes had access to an SVOD service in fourth-quarter 2014.