OTT rental revenue to surpass subscription services
By 2017, ABI Research expects over-the-top (OTT) revenue to quadruple to $32 billion, up from the expected $8.2 billion in 2012. Subscription services, such as Netflix, have led the OTT markets the past couple of years, which has helped push the market towards healthy growth. By 2014, however, ABI Research expects OTT rentals to surpass subscription revenues.
According to practice director Sam Rosen, connected CE and mobile devices continue to push consumer behaviour towards newer forms of media distribution such as OTT and multiscreen services. “Pay-TV services will continue to thrive, by implementing multiscreen services and supporting OTT content. In the end we expect an amalgamation of services that complement each other for many consumers,” he advised.
In time, advertising, in the same way as OTT rentals, is expected by ABI Research to pick up momentum as ad dollars increasingly shift to the OTT market. Connected CE and mobile/portable devices in particular present additional consumer touchpoints and enable more creative ways to connect or interact with consumers. These devices are capturing more of our attention as many consumers claim to multitask while watching TV. Finding new ways to better engage consumers through OTT experiences, therefore, will prove increasingly important as consumers adopt new viewing behaviours.
“While many consumers today claim to use mobile and portable devices while watching TV, most of us are in actuality poor at multitasking,” senior analyst Michael Inouye added. “In many cases, this means consumers are more acutely aware about the content on their portable device than the TV. While second screen advertising is not necessarily OTT content, it does speak to the importance of targeting these connected devices that extend the reach of content beyond the TV.”