OTT video

Enjoying unprecedented popularity, online video is upending the status quo and generating wide-scale trends among broadcasters and pay-TV providers, who are facing the greatest threat of disintermediation. If the production sector has by and large been strengthened by the new paradigm, the issue of diversity may still be an issue.

The TV market continues to follow the path of inexorable change, oblivious to resistance from veteran players who are having to adapt quickly to new realities. It is now just as obvious to say that linear TV will continue to lose ground to on-demand viewing, as it is to note that the multifarious iterations of TV and video content are still extremely popular with consumers, and whetting the appetites of an increasingly large and diverse group of companies.

Growing weight of OTT in TV revenue

The swift adoption of high-speed Internet access (both fixed and mobile), adapted screens and streaming boxes has translated into double-digit growth for the revenue generated by OTT video consumption. Since 2013, the market has grown by an average 36.9% a year, and is expected to continue to grow at an average rate of 20.5% a year between now and 2021, as part of an overall TV market whose average annual growth rate is forecast at 4.2%. By 2021, OTT video is expected to represent 18% of the total TV market, compared to 10% in 2017. Advertising and subscription revenue are both vital to the market’s future and the sector’s main sources of growth. In 2021, advertising is forecast to represent two thirds of OTT revenue, and SVOD close to a quarter.

Push for integration at the top of the value chain, and consolidation

In addition to this market’s economic weight, its development is having a huge and rapid effect on the entire audiovisual sector. It is forcing the traditional industry not only to incorporate OTT and on-demand viewing as full-fledged parts of their line-up, but also to devise national or pan-regional consolidation strategies. Pay-TV providers are working to incorporate production into their business, and developing international collaborations. More and more, telcos are exploring opportunities to buy media property. As value continues to rise up the chain, production appears to be the big winner in this new race for consolidation. However, the growing globalisation of both market players and consumption are creating a new threat to the sector: the homogenisation of tastes. It could be a boon for the American industry, but at the expense of the cultural diversity that Europe is working to protect.

Steady growth for advertising and subscriptions
OTT could take hold quickly in certain markets