Technology | Media | Telecommunications

Monday, September 29, 2014

OTT Video Entertainment will Reach $42.34B in 2020

The growth of the over-the-top (OTT) video entertainment industry was previously a primary concern of the American pay-TV sector, as more and more consumers chose to abandon the traditional high-cost cable and satellite TV services. Now this transition has become a worldwide phenomena.

Global online video entertainment revenues -- over fixed broadband networks within 51 reported countries -- will reach $42.34 billion in 2020. That's up significantly from $3.96 billion recorded in 2010 and the $19.03 billion expected in 2014, according to the latest market study by Digital TV Research.

Following the prior trend, the U.S. market will remain the dominant OTT territory for online TV and streaming video revenues.

However, its share of total revenues will drop from 59 percent in 2010 (when the U.S. recorded revenues of $2,326 million) to 37 percent in 2020 ($15,527 million) as the international markets catch up.

China's online television and video revenues will soar from just $37 million in 2010 to $3,033 million in 2020 -- to push China up to third place in the world rankings, with Japan in second place.

In addition to growing consumer demand, online video advertising has been the key driver for the OTT sector, with revenues of $8.3 billion expected in 2014 -- that's up from $2.4 billion in 2010.

Rapid advertising expenditure growth will continue, to reach a global total of $18.1 billion in 2020 -- as more advertisers shift spending away from legacy broadcast media channels.

Online television and video subscription revenues [SVOD] will climb from $1.06 billion in 2010 to $7.65 billion in 2014 and onto $16.77 billion in 2020. This means that SVOD will contribute 40 percent of total OTT revenues in 2020 -- that's up from 27 percent in 2010.

The U.S. generated online TV and video subscription revenues of $793 million in 2010, or 75 percent of the global total. Although its revenues will climb by 667 percent to $6,086 million, the American market will only account for 36 percent of the 2020 total.

Online TV and video rental/pay-per-view revenues will expand rapidly, climbing from $197 million in 2010 to $2,800 million in 2020. Download-to-own revenues are forecast to be $4,641 million in 2020 -- that's up from $332 million in 2010.