Report: U.S. OTT Competition Intense, Providers Look Beyond Borders For Revenue Growth

ADDISON, TEXAS—The U.S. market leads the world in adoption of OTT (over-the-top) services with 70 percent of its broadband households subscribing to at least one OTT service.

The findings, part of the newly released “OTT Video Services: Disruptive Globalization 2018” report from Parks Associates, underscore the success OTT services are garnering in the United States where about 226 OTT video services competed for viewers in 2018.

While the report finds that competition in United States is intense, OTT service providers are looking to other markets to enhance revenues from existing content. “Of the 226 services competing in the U.S., two-thirds are available in at least one other international market,” a summary of the report says.

In Canada, 64 percent of broadband households subscribe to an OTT video service, and in the U.K. 52 percent of such households subscribe. On a global basis, about 200 million households subscribed to at least one OTT service at home last year. Bollywood’s T-Series YouTube channel alone has 74 million subscribers.

[Read: Research Finds Live TV Viewing Shrinks In North America]

By the end of 2024, more than 310 million connected households –including broadband and/or mobile—will account for 586 million OTT video subscriptions, predicts Parks Associates.

The research organization forecasts that between 2019 and 2024, the number of households subscribing to OTT video services around the world will grow by 71 million, representing a 6 percent compound annual growth rate (CAGR). The volume of subscriptions will increase by more than 170 million during the period, an 11 percent CAGR and annual global revenue will grow more than $33 billion, nearly a 16 percent CAGR for the period.

OTT viewers in different countries have different viewing device preferences. U.S. viewers favor smart TVs and streaming media devices; U.K. viewers prefer smart TVs; and Canadians use game consoles more frequently than their U.S. and U.K. counterparts to access OTT video content.

For OTT service providers, winning rights to or developing desirable content is biggest challenge and most important task for OTT service providers, the Parks Associates report says.

“Multiple licenses per content often exist, providing rights on a geographic or sub-set basis,” says the Parks summary. “Garnering rights to popular content can be impossible if rights are already taken or expensive and limited.”

More information is available on the Parks Associates website.

Phil Kurz

Phil Kurz is a contributing editor to TV Tech. He has written about TV and video technology for more than 30 years and served as editor of three leading industry magazines. He earned a Bachelor of Journalism and a Master’s Degree in Journalism from the University of Missouri-Columbia School of Journalism.