Global displacement of traditional pay-TV services
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The growing popularity of watching online video entertainment has become a more common activity worldwide, particularly with the younger generation. As a result, these shifting video consumption trends have created a few market share gainers and many losers.
According to the latest market study by Juniper Research, subscriptions from Over-the-Top (OTT) video entertainment providers - such as Netflix and Amazon Prime - will generate $31.6 billion by 2019, that's up from just under $8 billion in 2014. Continued growth in the established markets of West Europe and North America, along with the emergence of key OTT players in the Far East and Asia-Pacific, will bring a surge in the adoption of OTT subscriptions over the next four years.
Assessing the threat to legacy pay-TV
Juniper observed that OTT services are seeing a rapid uptake by all people who want to view content, when and where it suits them. Mobile devices, such as notebook PCs and media tablets, are responsible for much of the change in video viewing habits.
Juniper argues that traditional TV broadcasters are facing increased competition as more services go over-the-top of pay-TV incumbents, allowing distributors such as Sling TV to provide customers with a more affordable, tailored alternative to traditional pay-TV.
Demand for Ultra High-Definition content
While key players such as Netflix and YouTube have launched Ultra-High Definition (UHDTV) video services, the adoption of 4K content has been slow to gain momentum thus far. Juniper is now predicting that adoption will improve over the next 2 years.
Netflix added its 4K offering to its highest priced subscription package last year, demonstrating their belief that consumers are willing to pay for the higher quality viewing experience.
OTT providers are gaining recognition as being the first to supply their subscribers with content in this UHDTV format. Meanwhile, TV sets capable of displaying this new content will eventually become more affordable, potentially accelerating consumer demand.
Other key findings from the market study include:
- Over 84 percent of OTT subscriptions will be made via connected TVs by 2019.
- IPTV revenues are set to more than double between 2014 and 2019, rewarding Network Operator’s investment in Triple and Quad-Play Services.
Do you think OTT services are a threat to traditional pay-TV? Let us know in the comments.
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