OTT TV to play vital role in driving portability and control of media
The rapid growth of the OTT TV (Over The Top) content market pushed the total value of sales past $8 billion in 2012, according to ABI research, providers of technology market intelligence. The three largest markets—North America, Europe, and Asia-Pacific —all experienced year on year growth in excess of 50% in 2012, with the spread of mobile devices, such as tablets and smartphones likely to push the market past $20 billion by 2015, according to the research.
At the same time, convergence between access to and control of media consumption has narrowed and the shift to digital and OTT distribution is accelerating, as mobile internet and cloud based services grow in sophistication and popularity. With the traditional terrestrial distribution model now one of many, revenue and subscription models are having to be adapted and developed by content providers to ensure they stay on top of the technology wave.
According to ABI research analyst Michael Inouye, “The dynamics around revenue generation continue to change and currently vary by region, for example, subscriptions are more significant in North America than Europe or Asia-Pacific. In time, however, we expect a greater diffusion of revenue across the various business models. For instance, in 2012 58% of OTT video revenue came from subscription services, but we anticipate this share to fall to less than 32% by 2018. In large part this is driven by a continual shift in consumer demand towards newer forms of digital content distribution.”
Of significant interest to content and OTT service providers is the way in which technology changes are driving the options consumers will have for viewing content in the future. Visible elements of this include Netflix and others expanding to international markets and the growth in catch-up service offerings, both in the UK and USA.
Shot Tower Capital, a boutique investment banking firm which publishes research papers on the OTT and media markets, also believes that consumers are moving more towards models that give them greater control over consumption choice on all levels. Terrestrial TV viewing is down, whilst usage of Spotify, Deezer ad You Tube, all of which can be accessed via OTT channels, continues to rise.
For channel providers to the OTT market such as Peer TV, these developments are significant, as they suggest take up of their platforms should rise quickly, once the tipping point is reached. Avi Vermus, the CEO Peer TV comments, “Currently, the market for OTT solutions is developing quickly, but it is too early to say what the market will look like in 10 years. What we can say though, is that usage of OTT is growing quickly, with time shifted viewing being particularly popular as a driver of the market. We are also seeing big changes in the way consumers view TV – preformatted channel line ups will be less important in the future, as consumers focus on the content they want to watch, on demand and drawn from a range of providers, which could include traditional broadcasters and internet only players such as Netflix and Amazon.”
Peer TV was one of the first companies in the market to launch an Android based set top box, the eTV. The eTV enables broadcast content to be distributed via the internet and downloaded directly onto a normal TV screen. The service also makes websites such as Facebook and YouTube available via television sets so converging pay TV and the internet.