Over the Top Market size is expected to grow at a rapid pace over the coming years owing to rise in the adoption of smart connected devices. The convenience in viewing broadcasting content is encouraging several consumers to use these services. Internet is exponentially overtaking television as a standard way individuals watch media. The compatibility of smart devices with OTT services offers flexibility in terms of space and time for watching online content. Moreover, Subscription Video on Demand (SVOD) platforms, such as Hulu, Netflix, and Amazon Prime, among others are offering users unlimited access to an extensive range of programs on a monthly basis, making streaming popular globally. In January 2019, Netflix revealed that its subscriber base has grown to around by 9 million users, showcasing a rise of 26% in the user-base. Such factors are anticipated to drive the over the top market over the coming years.
Increased smartphone adoption and the availability of wireless broadband is driving the over the top market growth. Internet service providers are offering enhanced broadband connectivity at an affordable price, enabling consumers to stream videos and download content at a high speed. With the rise in mobile workforce and smartphone users, companies are providing customers accessible platforms. The unceasing rise in content and globalization have forced companies to enable the consolidation of content by category. The increasing demand for these services has led to platform providers enhancing their offerings to keep the audience engaged and to remain competitive in the over the top (OTT) market. Moreover, several organizations are widely employing cloud-based solutions for implementing the central repository due to the rising complexity related to managing & maintaining the content.
The presence of stringent government regulations & policies is a major challenge that will impact the growth of the over the top market. With the increasing adoption of these services, government administrations are creating local taxation, security, and content regulations for the providers. For instance, in August 2017, the Indonesian Government under the Ministry of Communication and Informatics (MCI) announced a regulatory framework for over the top providers to establish a permanent operation with network providers across the country and the use of local IP numbers and national payment gateways for their services. The policies and rules can impact the convenience of consumers for using these services, thereby impacting the adoption and over the top market growth.
In the over the top (OTT) market, video content type accounted for the majority of the industry share. With this content type, viewers can choose their own filmed entertainment through computers, smartphones or smart TV systems from an extensive selection available. With low data tariffs and rising smartphone penetration, subscribers are moving past traditional desktop browsers to watch video content on mobile applications. Moreover, the industry is witnessing the entry of many new vendors, thereby fueling competition and an increase in investment for premium content. Players are developing original content that will help them engage and capture a new subscriber base. Smartphones are allowing consumers to view video content conveniently, resulting in a higher time spent in viewing video content. These factors are positively impacting over the top market growth.
North America over the top market is witnessing high growth due to the availability of high-speed internet. In the region, content generation, consumption, and distribution are disrupting television. In January 2018, there were around 120 million OTT subscriptions in the U.S., showcasing that the internet is increasingly overtaking television as the standard way customers consume media. Growing acquisitions and partnerships in the region are reshaping the video media landscape. Live streaming & short-form contents are witnessing a rise in demand. Viewers are spending eight times more time on live streaming in comparison with on-demand videos. In 2018, live streaming witnessed a hike, with major events such as the FIFA World Cup and Academy Awards being extensively covered. Owing to such trends, companies are experimenting with new business and subscription models for content monetization, driving the over the top (OTT) market growth.
Key players operating in the over the top market include Tencent Holdings Ltd., Limelight Networks, Facebook, Inc., Yahoo, Inc., Google, Inc., Apple, Inc., Microsoft Corporation, and Netflix, Inc., among others. These companies are launching innovative services, collaborating with partners such as traditional Mobile Network Operators (MNOs) and OTT video providers to expand and capture the industry share. For instance, in May 2019, Airtel, a telecommunications services company based in India, announced to offer free subscription to Amazon Prime and Netflix for both mobile & broadband customers. The company is also offering access to OTT content from ZEE5 by Essel Group, Eros Now, and HOOQ TV, among others on its mobile application Airtel TV Premium. Such collaborations/partnerships are propelling the over the top market demand.