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Over-the-Top Video Use Reaches the Tipping Point


We've reached a significant tipping-point for over-the-top (OTT) video consumption in the U.S. market. Now that online video user penetration surpassed 50 percent of the general population in 2011, it's truly become a mainstream pursuit.

Americans are watching more video on more devices than ever before. What are the implications for the future outlook? While the accelerated growth of the last year may slow, we can anticipate continued expansion of the OTT video user population.

By 2015, U.S. online video viewers will represent 60 percent of the general population and 76 percent of internet users, according the the findings from the latest market study by eMarketer.

"Audience growth over the next four years will come from all demographic segments, but it will be more pronounced among preteen children, older boomers and seniors," said Paul Verna, eMarketer senior analyst.

These groups have traditionally lagged teens and younger adults in their video viewing activity, but the gaps will start to close as the market matures. Therefore, marketers should consider the opportunities to take advantage of growth pockets among viewers -- at either end of the age spectrum.

Among online video viewers, watching premium content is becoming increasingly popular. eMarketer estimates that 49 percent of U.S. adult online video viewers watched full-length TV shows on the web at least monthly this year, rising to 62.8 percent by 2015.

Full-length movies are also becoming popular, with 37.1 percent of U.S. adult online video viewers downloading or streaming at least one feature film monthly in 2011. eMarketer believes that the viewership rate could increase to 54.1 percent by 2015.

Mobile video adoption is poised to grow rapidly for at least the next four years. Factors contributing to the upside potential include the ongoing strength of the smartphone market, healthy competition among mobile OS ecosystems -- notably Apple iOS and Google Android -- and viewing continuity across device screens.

"As tablets attract a larger share of video viewing, smartphones are benefiting because most tablet users also own smartphones and typically have the same apps on both devices," noted Verna.

With more video content flowing to these apps, users are choosing their preferred device screen at any given time. This means they're switching between tablets and smartphones, or between notebook PCs and one of the other devices.

In 2011, U.S. smartphone viewers represent 90 percent of the mobile video population, according to eMarketer estimates. By 2015, this percentage will rise to 98.5 percent.

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