Although still in a nascent stage and despite an uncertain economic framework, the OTT TV market will grow at an average annual rate of 53 per cent and will be worth €1.9 billion in 2015.
The figures are from The Internet Era of TV – Expanding Entertainment report published by ITMedia Consulting. The Italian research centre estimates that in Western Europe, the total revenues from the distribution of Internet video on TV and mobile Internet video will reach €534 million by the end of 2012.
At an early stage the predominant business model will be advertising: in this phase already established players will use the network to stem losses, limit “cord cutting” and increase customer loyalty. In a second step, these services will have less weight to transactional and subscription-based ones.
In fact, according to IT Media Consulting, the largest portion of revenue from OTT TV will depend on the migration of home video services based on physical media to online rental services like Netflix and the like, and the spread of non-linear and time shifted offers by broadcasters and telecommunications operators.