OTT Services Market Driven by Radical Improvements in Internet Technologies

Smartphones are now ubiquitous and technology pertaining to broadband internet has improved multiple folds in the past decade. A paradigm change as a result of these two factors has been the preference of large populations for video content, which is even threatening to overtake television and other sources of media for everyday entertainment and information. Not only ongoing events are now available to be watched live and online, vendors are now able to provide exclusive video content for their consumers with improved encryption. In the past year or so, several governments have also implemented strict guidelines against illegal file sharing such as torrent site, opening the widow of revenue opportunity that was blocked by piracy.

All these factors have led to the development of over the top (OTT) services, wherein the vendors can deliver content without any involvement in planning, as the product is directly provided to the consumers over the top of internet service network. A recent study by Transparency Market Research has projected that the demand in the global over the top services market will increment at an impressive CAGR of 16.4% during the forecast period of 2017 to 2025. The report has evaluated that the global OTT services market was worth US$925.87 bn in 2016, and estimates the opportunities to swell up to a valuation of US$3,538.04 bn by 2025.

What are the key factors driving the OTT services market?

Growing adoption of device-based computing, increase in wide availability of broadband infrastructure, economical charges for the usage of OTT platforms and services, growing production of in-house web series, high demand for time-shifted TV, increasing usage of OTT on mobile devices such as smartphones, laptops, and tablets, increase in the requirement for compliance and verification, and personalization of technology are some of the prominent factors that will ensure a prosperous future for the Over the top services market. On the other hand, high popularity of free online video streaming, reluctance of customers to spend on OTT services, low scope of customer retention, and less number of long-term subscriptions are a few challenges obstructing the OTT services market from attaining its true potential. Nevertheless, the vendors of this market are expected to gain new opportunities from the emergence of video streaming devices, increase in the usage of multiple DRMs in web browsers, and increased adoption of RTB.

Which market segments are showing greater promise?

Based on business model, the report segments the global over the top services market into premium and subscription, adware, and e-commerce, and rates the former as most lucrative segment, which accounted for nearly 48% of the total demand in 2016. This particular segment related to earning a fixed revenue from customers who pay for download or access to their application. Application-wise, the TMR report categorizes the global OTT services market into communication and media content including gaming, audio and video, and web content, whereas on the basis of end use, the market has been bifurcated into healthcare, media and entertainment, e-commerce, education, and IT.

What is the nature of competition among the leading vendors?

The global OTT services market is highly fragmented, owing to the presence of a large pool of players. However, as established players are expanding their footprint across various regions, domestic vendors are struggling to compete with the quality and quantity of content and may dissolve in the near future. Netflix, Inc., Google, Inc., Facebook, Inc., LinkedIn Corporation, Twitter, Inc., and Apple, Inc. are some of the notable vendors operating in this market.


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