Analyst: DTC the new trajectory for OTT in 2020
January 9, 2020
ABI Research believes that 2020 will represent a profound step toward a future where more OTT content goes Direct-to-Consumer (DTC) and VoD reaches 900 million subscriptions worldwide.
Analysts at the global tech market advisory firm have identified trends that will – or won’t – shape the technology market the next twelve months.
“After a tumultuous 2019 that was beset by many challenges, both integral to technology markets and derived from global market dynamics, 2020 looks set to be equally challenging,” said Stuart Carlaw, Chief Research Officer at ABI Research.
What will happen in 2020:
DTC is the new trajectory for OTT video:
“In 2020, more and more consumers will be moving away from the forced packaging of channels into fixed bundles. As the content landscape becomes more fragmented and consumers are presented with a growing list of options, the ability to pick and choose which “channels” of content best fit their needs will only become increasingly more important,” said Michael Inouye, Video and Cloud Services Principal Analyst at ABI Research.
The growing penchant among content owners to DTC is creating a more challenging market for Virtual Multichannel Video Programming Distributors (vMVPDs). As a result, subscriber bases in some of the services have slowed, if not declined. The arrival of more DTC services in 2020 will further fragment the content landscape, making it an increasingly crowded space as more services vie for consumers’ content budgets.
5G fixed wireless rollouts will accelerate:
“Accelerated growth in the 5G Fixed Wireless Access (FWA) will begin in earnest in 2020, which is great news for consumers,” says Khin Sandi Lynn, Video & Cloud Services Analyst at ABI Research. For capacity provided by 5G, 5G FWA garners high interest from operators to replace last-mile fibre connectivity for residential broadband services. This allows greater service coverage and improved network delivery for customers served. While there are still barriers to adoption, similar to traditional 5G (infrastructure is expensive and time-consuming to scale), many other operators and equipment vendors have already been trialling 5G FWA deployment across different regions. “Qualcomm’s recent announcement of 5G FWA partnerships, with more than 30 OEMs and ongoing spectrum acquisitions by operators indicates that the ecosystem is getting ready to speed up the rate of deployment,” Lynn added.
8K TVs won’t happen in 2020:
“Announcements of 8K Television (TV) sets by major vendors earlier in 2019 attracted much attention and raised many of questions within the industry,” said Lynn. “The fact is, 8K content is not available and the price of 8K TV sets are exorbitant. The transition from high definition to 4K will continue in 2020 with very limited 8K shipments – less than 1 million worldwide.”