OTT Video to Be a Game Changer for Entertainment Industry

29 December 2015

Analysis

The skyrocketing growth of over-the-top (OTT) video is radically transforming the entertainment value chain — not only changing the ways consumers consume content, but how that content is created and distributed.  While this tectonic paradigm shift is disruptive to traditional business models of content creation and distribution, it is not necessarily bad news for existing media and entertainment companies that stay ahead of the competitive curve.

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Analysis

The skyrocketing growth of over-the-top (OTT) video is radically transforming the entertainment value chain — not only changing the ways consumers consume content, but how that content is created and distributed.  While this tectonic paradigm shift is disruptive to traditional business models of content creation and distribution, it is not necessarily bad news for existing media and entertainment companies that stay ahead of the competitive curve.

As OTT video continues to grow by leaps and bounds, network operators and Pay TV companies in particular face challenges such as bandwidth constraints, costs and live-streaming of events.  That said, there are considerable opportunities for organizations that embrace this new world order of device-agnostic content that is available anywhere and is capable of delivering high-quality, personalized consumer experiences.

News

The global OTT video services marketplace continues its rapid rate of change, impacting the video ecosystem across world markets, according to a recent report from Digital TV Research.  The report forecasts global OTT TV and video revenues will reach $51.1 billion in 2020; a massive increase from the $4.2 billion recorded in 2010 and the $26.0 billion expected in 2015.

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Global electronic home video revenue is set to rise from $15.28 billion in 2014 to $30.29 billion in 2019, according to a recent PWC report.  That adds up to a combined annual growth rate (CAGR) of 19 percent as online video and streaming services are beginning to attain a significant foothold in many markets.

…Recent Deals Illustrate State of OTT Market

Several recent news items illustrate the state of the market:

  • New research from Parks Associates finds the global annual unit sales for streaming media devices — including both player and stick form factors — will increase from 30 million units in 2013 to 86 million units in 2019.
  • In a direct challenge to Netflix, Amazon Prime and Now TV, Disney will launch its own subscription-based video streaming service in the UK. The service, dubbed Disney Life, will feature many of the company’s films, music, books and TV programs (but not Star Wars and Marvel franchises) in a single app for £9.99 a month.
  • In a clear appeal to cord-cutting millennials, CNN has funded the launch of Great Big Story — a “socially distributed video network” that will stream newsy video stories to iOS and Android mobile devices.
  • Despite the obvious market opportunity for streaming live sports events, OTT delivery platforms can experience delays of several minutes — an unacceptable tradeoff for most die-hard sports fans.

 

Sources:

http://www.prnewswire.com/news-releases/global-ott-tv–video-forecasts-300126146.html

http://www.bbc.com/news/technology-34603062

http://variety.com/2015/digital/news/cnn-great-big-story-streaming-video-vice-buzzfeed-1201621958/

http://www.pwc.com/gx/en/industries/entertainment-media/outlook/segment-insights/filmed-entertainment.html

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