Online video entertainment has disrupted most legacy media companies that refused to acknowledge the market opportunities beyond traditional pay-TV services. This shift has become a global phenomenon. The impact and implications are far-reaching.
Western European over-the-top (OTT) television and video revenues will more than double between 2015 and 2021. However, growth rates within each nation will vary considerably, according to findings from the latest market study by Digital TV Research.
"OTT adoption is already high in Scandinavia, the Netherlands and the UK, but it has been much more muted in other countries -- such as France, Spain and Portugal," said Simon Murray, principal analyst at Digital TV Research.
European OTT TV Market Development
OTT TV and video revenues in Western Europe will reach $14.64 billion in 2021 -- that's up from $6.40 billion in 2015. From the $8.25 billion in revenues to be added between 2015 and 2021, the UK will contribute $2.30 billion, Germany $1.34 billion, France $1.13 billion and Italy $0.99 billion. Moreover, the UK will remain the market leader.
Subscription video on-demand (SVOD) will become the region's largest OTT revenue source in 2018 before advertising video on-demand (AVOD) sites regains its crown in 2020. The AVOD sector has been boosted by the rapid expansion in mobile advertising.
AVOD will bring in $5.79 billion by 2021 – that's a $3 billion increase on 2015. The UK will supply $2,333 million of the 2021 advertising total, followed by Germany with $904 million.
SVOD revenues will total $5,632 million by 2021 – that's up from $2,098 million in 2015. Nearly $1 billion will be added in 2016 alone. The UK (up by nearly $800 million between 2015 and 2021 to $1,507 million) will remain the SVOD revenue leader – generating as much as second-placed Germany and third-placed France combined in 2021.
European OTT Video Market Upside
Digital TV Research analysts forecast 53.71 million SVOD subscriptions by 2021 -- that's up from an expected 31.43 million by end-2016. More than 8 million subscribers will be added in 2016 alone. Nearly a third (30.7 percent) of the region’s TV households will subscribe to a SVOD package by 2021 -- that's triple the 13.6 percent recorded at the end of 2015.
Sweden will have more SVOD subscribers than Spain in 2021, regardless of only having a quarter of the population. Despite this, the number of subscriptions will quadruple in France and Italy between 2015 and 2021 and will grow eight-fold in Spain.