OTT Revenue On Pace To Double In Four Years

Show of hands: If you wanted to watch a James Bond marathon, would you turn to a Netflix-esque over-the-top service, or a traditional network running a marathon of the movies?

A few years ago, there was only one answer: the network. Now, there are more choices.

While the question is a rhetorical one without hard and fast numbers, many media executives are betting that the Netflix-viewing option is poised to command a larger chunk of consumer behavior in the next few years.

The premium OTT market is on pace to grow by leaps and bounds over the next several years, fueled by competition, new entrants and big investments, according to a report from Ooyala and Vindicia surveying U.S. media executives on the growth prospects for OTT in the United States.

The report pegs OTT revenue to hit $8 billion to $12 billion in 2018, up from $4 billion last year. Not surprisingly, Netflix will remain at the top, but its share will likely decline from 85% of the market last year to about half in 2018. Niche services will grow quickly, with experts predicting about 15 to 20 specialist services gaining 100,000 or more subscribers by 2018.



These increases are possible because the foundation of the industry has been built already with extensive broadband services, payment infrastructure and the proliferation of connected TVs, the report said.

What’s the best way for incumbents to deal with these expected shifts? Pair up. Expect OTT bundles from pay TV providers to become more common.

Many research firms have conducted studies on OTT growth and potential. By way of comparison, Digital TV Research said earlier this summer that OTT TV and video revenue in the United States will account for $19.1 billion in 2020.

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