Digital TV and online video has seen the battle between Over the Top (OTT) providers and traditional television networks pushed to the forefront. In order to differentiate themselves, and reduce the need to rely on expensive content partnerships, OTTs will produce more of their own entertainment content.
According to the latest worldwide market study by Juniper Research, Subscription Video on Demand (SVoD) services -- from leading providers such as Netflix and Amazon -- will drive a surge in OTT revenues to reach $120 billion in 2022, and that's up from $64 billion in 2017. In this environment, the traditional expensive bundle of pay-TV services will surely continue their decline.
Original Content Market Development
The upside market opportunity for the innovative low-cost video entertainment providers is significant. The in-depth market research also uncovered that over a quarter of global households will eventually subscribe to SVOD services by 2022.
The new research found that expenditure by OTTs on original content was increasing significantly. As an example, Juniper estimates that Netflix will spend over $6 billion during 2017-18, in contrast to the publicly funded BBC, which is investing a comparatively small sum of $1.4 billion.
All the leading SVOD players, including Netflix, are seeking to out-spend traditional video entertainment providers; attempting to deliver original content and reduce reliance on expensive back-catalogs.
"Success will hinge on whether these providers can continue to produce hits such as ‘Stranger Things’. As consumers become more fluid in their uptake and loyalty to video services, OTTs could just as easily see users switch off," said Lauren Foye, senior analyst at Juniper Research.
In addition, Juniper found that some OTTs will pursue sporting event rights, with Amazon likely to bid for rights to the Premier League in February 2018. The research argued that with such content owned by different providers, customers will have to choose from multiple competing subscription options.
Outlook for New OTT Market Innovation
That being said, the research identified the potential for traditional broadcasters to hold an advantage over OTT firms in the provision of local content. Some regional OTT services have launched, such as iFlix, but these do not provide the same granular level of local coverage that broadcasters can offer.
The delivery of media via Internet Protocol (IP) will have a benefit to broadcasters in driving new customers to their own OTT services -- such as the BBC's iPlayer -- accessed via the ‘Red Button+’ on connected TVs. Juniper forecasts that data usage will soar on these connected devices, approaching 800,000 Petabytes per year by 2022.
According to the latest worldwide market study by Juniper Research, Subscription Video on Demand (SVoD) services -- from leading providers such as Netflix and Amazon -- will drive a surge in OTT revenues to reach $120 billion in 2022, and that's up from $64 billion in 2017. In this environment, the traditional expensive bundle of pay-TV services will surely continue their decline.
Original Content Market Development
The upside market opportunity for the innovative low-cost video entertainment providers is significant. The in-depth market research also uncovered that over a quarter of global households will eventually subscribe to SVOD services by 2022.
The new research found that expenditure by OTTs on original content was increasing significantly. As an example, Juniper estimates that Netflix will spend over $6 billion during 2017-18, in contrast to the publicly funded BBC, which is investing a comparatively small sum of $1.4 billion.
All the leading SVOD players, including Netflix, are seeking to out-spend traditional video entertainment providers; attempting to deliver original content and reduce reliance on expensive back-catalogs.
"Success will hinge on whether these providers can continue to produce hits such as ‘Stranger Things’. As consumers become more fluid in their uptake and loyalty to video services, OTTs could just as easily see users switch off," said Lauren Foye, senior analyst at Juniper Research.
In addition, Juniper found that some OTTs will pursue sporting event rights, with Amazon likely to bid for rights to the Premier League in February 2018. The research argued that with such content owned by different providers, customers will have to choose from multiple competing subscription options.
Outlook for New OTT Market Innovation
That being said, the research identified the potential for traditional broadcasters to hold an advantage over OTT firms in the provision of local content. Some regional OTT services have launched, such as iFlix, but these do not provide the same granular level of local coverage that broadcasters can offer.
The delivery of media via Internet Protocol (IP) will have a benefit to broadcasters in driving new customers to their own OTT services -- such as the BBC's iPlayer -- accessed via the ‘Red Button+’ on connected TVs. Juniper forecasts that data usage will soar on these connected devices, approaching 800,000 Petabytes per year by 2022.