OTT Platforms Could Hit $12B IN 2018, Netflix Will Dominate

Over-the-top TV platforms could triple in revenue in four years.

Revenues from OTT platforms could rise from $8 billion to $12 billion in three years from the $4 billion level in 2014, according to Ooyala and Vindicia, in partnership U.K.-based MTM, a research and consultancy firm. Compounded annual growth rate will be 20% to 30%.

In three years, the study believes there will be 15 to 20 key OTT providers having around 100,000 or more paying subscribers.

Research was derived from 45 senior industry executives -- as well as analyzing synthesizing a range of publicly available information and industry data relating to the development of premium OTT services in the U.S. market.

Netflix will continue to be the dominant OTT leader -- but will see its share drop to 50% in 2018 from 85% in 2014.



In 2014, Netflix pulled in $3.4 billion of the entire $4.0 billion marketplace -- excluding Amazon Prime Instant Video). It is estimated Amazon subscription video on demand efforts pulled in $1.5 billion in 2014, with Hulu tallying $550 million.

The report suggest there will be three main OTT categories: Those coming from pay TV providers, such as Sling TV; major studio/broadcast owners, such as HBO Now and CBS All Access; and consumer electronics company, Sony PlayStation Vue.

Additionally, there will be niche independent services, including those from sports leagues like Major League Baseball and entertainment groups like the Met Opera.

Using estimates from Pacific Crest, the report notes that total TV/Internet video advertising market was $81 billion in 2014; with multi-video program distributors revenues (less affiliate fees) at $53 billion; and network affiliate fees at $47 billion.

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