Advanced Television

Connected CE devices help broadcasters grow OTT revenues

August 23, 2012

OTT video service providers are keen to establish a strong presence on the variety of connected CE devices being installed in consumers’ homes, given the revenue opportunity that these devices present, according to IMS Research.

Findings from the firm’s recent study – Business Model Evolution in OTT and On-demand Video Markets – 2012 Edition – indicate that in 2017, 27 per cent of OTT video transactions will be initiated via fixed connected CE within the home, accounting for 46 per cent of world OTT market revenues generated that year.

IMS Research suggests that geographic expansion of large OTT portals such as Amazon, Apple and Netflix is one of the main drivers behind the growing adoption of OTT video via connected CE, both fixed in-home devices and portable CE such as tablets and smartphones. Furthermore, platforms such as UK’s YouView and HbbTV in mainland Europe are enabling broadcasters and pay-TV operators to extend the reach of their existing video assets. IMS Research forecasts that in 2017, broadcasters will account for 17 per cent share of world OTT video market revenues, and pay-TV operators for 11 per cent share.

According to Anna Hunt, principal analyst with IMS Research and author of the study, broadcasters need to be innovative on how to effectively monetise their content beyond the traditional means because content such as movies and fictional TV series are expected to transition to on-demand delivery more rapidly. “With OTT technologies, broadcasters are given an opportunity to complement their broadcast offerings, to improve sports and live events, and to monetise content that has passed the seven-day catch-up TV window,” she advised.

The study estimates that broadcasters will generate $1.8 billion in OTT market revenues in 2012, mostly through advertising, and will grow this to $5.9 billion in 2017. Over the next five years, more broadcasters will attempt to monetise back catalogue content via the pay-per or subscription model, as well as look to international expansion as a means of generating OTT revenues, as in the case of the BBC’s global iPlayer app.

“Many of the major broadcasters in Europe are offering OTT apps for connected CE devices and supporting these services advertising revenues. Yet, these alternative efforts are never meant to replace the broadcast channel. A concern exists, particularly in emerging markets such as Russia, that these alternatives may affect typical channel performance and distract viewers away from the broadcasters’ core offerings,” she warned.

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