Report Code: A01899
The global OTT market size was valued at $121.61 billion in 2019, and is projected to reach $1,039.03 billion by 2027, growing at a CAGR of 29.4% from 2020 to 2027. Over-the-top service refers to movies and TV shows that are delivered directly to digital users without the requirement of cable or satellite television subscription. OTT content can be directly downloaded and viewed on user’s demand. This type of content includes movies and TV services, and is delivered directly over the internet to connected devices such as PCs, tablets, smartphones, and consoles. Presently, over-the-top services are at a relatively nascent stage, and are widely accepted as a trending technology across the globe. The over-the-top market is projected to witness innovative and advanced transformation, which enable the customers to access everything they want at a single space.
Ad-supported VoD platforms is experiencing strong growth in ad revenues, thereby making the advertisement-based revenue model popular amidst the COVID-19 pandemic. For insatnce, five of the major ad-supported streaming platforms such as Hulu, Peacock, Roku, Pluto TV and Tubi, ad revenue reached 31% year-over-year in the second quarter of 2020.
The smartphone segment dominated the overall over-the-top market share in 2019, and is expected to remain dominant during the forecast period, due to increase in adoption of smartphones to stream over-the-top services and growth in potential market for larger screen smartphones in developing economies. In addition, the segment is expected to witness high growth rate in the upcoming years, due to the advent of affordable android-based smartphones, which have democratized online gaming and brought gameplay to millions of smartphone users.
The media & entertainment industry dominated the over-the-top market share in 2019, and is expected to remain dominant during the forecast period, due to rise in number of digital video consumers. This is expected to increase the demand for OTT services in the media & entertainment industry. However, the IT & telecom industry is expected to witness highest CAGR during the forecast period, due to upsurge in demand for over-the-top services in the telecommunication industry for video calling, voice, and messaging services.
North America dominated the overall OTT market share in 2019, as the region is equipped with high broadband access as well as number of services, which have already moved on to providing several videos in HD and 4K. Moreover, new services such as AT&T, ESPN, Turner Sports, and Crown Family Media Networks experienced strong traction in the U.S., which fuels the growth of the market. However, Asia-Pacific is expected to grow at the highest CAGR, as telecommunication providers offer OTT services with their data plans, which fuels the over-the-top market growth. In addition, increase in penetration of mobile devices and government policies regarding regulating the content on video streaming platforms are enabling the exponential rise of adoption of OTT services.
The report focuses on the growth prospects, restraints, and over-the-top market analysis. The study provides Porter’s five forces analysis of the online/virtual fitness industry to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the over-the-top market trends.
The global over-the-top market is segmented into component, device type, content type, revenue model, user type, end user, and region. On the basis of component, the market is bifurcated into solutions and services. Depending on device type, it is classified into smart devices, laptops, desktops & tablets, gaming consoles, set-top box, and others. By content type, it is fragmented into video, audio, games, communication, and others. According to revenue model, it is categorized into subscription, advertisement, hybrid, and other. As per industry vertical, over-the-top industry is segregated into media & entertainment, education & training, health & fitness, sports & live events, IT & telecom, e-commerce, BFSI, government, and others. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Market Landscape & Trends
The OTT market has grown quickly in recent years due to the evolution of customer preferences and technology improvements. Cloud computing has become a crucial tool for storing and streaming material for OTT providers. Cloud-based services enable suppliers to reach a large audience with high-quality content due to their scalability, flexibility, and affordability. Viewers are given personalized content recommendations due to AI. AI-powered algorithms examine user behavior and preferences to make suggestions for engaging and pertinent content. OTT providers use this technology to improve user engagement and retention. Viewing experiences of users are being improved by the introduction of VR/AR technologies. Immersive content, which enables viewers to engage with the content and get the feeling of being a part of the story, which is being tested by OTT providers. In addition, the OTT sector is anticipated to undergo a transformation due to quicker and more dependable internet connections of 5G technology. OTT providers are expected to be able to broadcast high-quality material in real-time, without buffering or latency, due to this technology. Blockchain technology is being investigated as a potential means of offering safe and open payment methods for OTT content. OTT providers are anticipated to benefit from using this technology to save transaction costs and improve payment system transparency. The OTT market is being shaped by technological advancements, giving providers new options to reach a large audience with top-notch content. Cloud computing, AI, VR/AR, 5G technology, IoT, and blockchain technology are some of these trends. The OTT market is expected to become more competitive as technology advances, with providers introducing innovative features and services to draw and keep subscribers.
Post COVID-19, the size of the OTT market size is estimated to grow from $171.36 billion in 2020, and projected to reach $1,039.03 billion by 2027, at a CAGR of 29.4%. The current estimation of 2027 is projected to be higher than pre COVID-19 estimates. The COVID-19 outbreak has positive impact on the growth of the global OTT market, due to constantly rising demand for OTT services. This demand is majorly attributed to continuous growth in online communications services, owing to the lockdown imposed, as more number of viewers are communicating through various online platforms. Moreover, the consumption of online entertainment platforms is increasing remarkably in the developing economies such as India and China, which is positively impacting the growth of the market. According to the survey by InMobi, a mobile marketing platform, 46% viewers are watching more online content, while another consumer survey has revealed that OTT consumption primetime has moved to 7 pm onwards, as opposed to 10 pm–12 am before.
The growth of the global over-the-top market is driven by factors such as rise in demand for OTT services in developing regions, increase in SVoD services, availability of variety of content, surge in demand for live streaming channels, rise in demand for OTT services & gaming during the lockdown period implemented due to the COVID-19 outbreak, and availability of freemium models in price-sensitive markets. In addition, emergence of new OTT markets and new developments in OTT technology are expected to notably impact the growth of the market. Lack of data network infrastructure and latency issues further affect the growth of the market. However, each of these factors is anticipated to have a definite impact on the market growth during the forecast period.
Owing to the outbreak of COVID-19, governments of almost each country have enforced lockdown, which has resulted in the massive growth of OTT platforms. According to the CXOs, viewership on the OTT platforms is expected to grow further during the over-the-top market forecast period, as television channels are running out of content. Owing to the lockdown imposed, TV channels are running old content, as they have been unable to shoot. This has drifted viewers toward OTT to watch fresh content, which is expected to notably drive the growth of the market.
Moreover, as the demand for new OTT entertainment content has grown tremendously, number of OTT service providers are offering some of their content for free and are launching new content on their platform. For instance, to cater to the continuously growing demand of consumers, platforms such as Zee5 and Amazon Prime Video have made few of their shows free to watch under its #BeCalmBeEntertained initiative. In addition, the Indian OTT service provider, Zee5 platform has witnessed almost an 80% increase in subscriptions and over 50% growth in time spent recently. Furthermore, Amazon Prime Video recently has made some of the kids’ content on its platform free in India.
OTT operators are expected to offer more live streaming channels in the future. In addition, OTT content will witness a major transformation with breaking news reaching Periscope, Facebook Live, and even YouTube. Broadcasters in the U.S. are collaborating with multi-channel video programming distributors (MVPDs) to offer a ready version of live and linear feeds, which can be packaged as OTT offerings, thereby fueling the growth of the market. As the COVID-19 pandemic began and lockdown was implemented, streaming of live content increased tremendously, which is opportunistic for the market. For instance, the live streaming sector grew by 45% between March and April in 2020, and these gains are directly attributable to the outbreak of coronavirus. Moreover, viewers are live streaming Twitch concerts, Zoom lectures, office meetings, and virtual book launches, which is expected to provide lucrative opportunities for the market.
Key Benefits For Stakeholders
Over-the-top Market Report Highlights
|By Component|| |
|By Device Type|| |
|By Content Type|| |
|By Revenue Model|| |
|By User Type|| |
|By End User|| |
|By Region|| |
|Key Market Players||APPLE INC., TELSTRA CORPORATION LIMITED, AMAZON WEB SERVICES, INC., MICROSOFT CORPORATION, TENCENT HOLDINGS LTD., RAKUTEN, INC., GOOGLE, LLC., NETFLIX, INC., HULU, LLC, FACEBOOK, INC.|
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Over-the-top market is in the growing stage in Asia-Pacific, the Middle East & Africa (MEA), and Latin America; therefore, OTT platforms in these regions have immense scope for enhancement. In addition, there is huge return on investment in the OTT market, owing to availability of opportunities for the market in developing regions due to improvement in network infrastructure, increase in demand for live sports, shift in customer preference toward OTT services, and availability of freemium model. Hence, OTT platform vendors continue to visualize more effectively on the need for platform and services across all regions. Moreover, increase in number of smart connected devices is one of the major factors that drives the market growth, as many consumers prefer watching online content on smartphones or tablets.
Moreover, e-services comprising e-health, e-learning, e-business, and e-commerce is expected to be the largest application segment, in terms of revenue. In addition, the segment is anticipated to hold its foremost place throughout the forecast period. Media content and cloud services are expected to produce higher revenue in the forthcoming period, owing to quick content and service on demand made available through high-speed internet at reasonable prices.
Owing to the COVID-19 pandemic, video consumption has increased considerably all across the globe. For instance, in the U.S., Comcast Corporation, an American-based telecom operator, has seen almost 50% increase in VoD in March & April 2020. As SVoD and linear OTT environments have become overcrowded in past few years, a number of OTT service providers are shifting toward advertisement-based video-on-demand (AVoD) to provide low-budget content. Advertisements supported OTT services are further expected to increase on a global scale, owing to increase in revenue generated by YouTube in Latin
America and Europe markets, entry of new players in the U.S., and the consolidation of the Asian market.
Post COVID-19 outbreak, over-the-top market has witnessed noteworthy growth, and is projected to continue the trend. Major factors contributing toward the growth of this market include integration of augmented reality (AR) and virtual reality (VR) on smart devices for gaming application, which provides real-time experience to users while playing games. Moreover, rapid adoption in next-generation cellular network services such as 5G technology in some of the developed economies such as the U.S. is expected to boost the adoption of OTT services for entertainment during the forecast period. 5G network will deliver more reliable and faster cellular data speed to provide better streaming video quality.
The global over-the-top market witnesses competitive environment with the originality of content and innovation in services being some of the key differentiating factors. This has led to the growth of in-house
produced content across various platforms.
Original in-house web series across genres such as drama, sitcoms, action, comedy, talk shows, and documentaries are some of the highest viewed digital videos on OTT platforms such as Netflix and YouTube. The market is highly fragmented, as it comprises several international and regional vendors. The global players further focus on increasing their presence in many regions. This increases the competition in terms of quality, safety, features, and price for local vendors.
Many international players are expected to increase their presence during the forecast period by acquiring domestic players who will increase their market shares by expanding their respective product portfolios. Some of the key players profiled in the report include Amazon Web Services (AWS), Netflix, Hulu, LLC, Google LLC, Apple Inc., Facebook, Telestra, Rakuten Inc., Microsoft Corporation, and Tencent Holdings Ltd. These players have adopted various strategies to enhance their service offerings and increase their market penetration. For instance, in November 2017, Amazon Web Services (AWS) launched a suite of products geared specifically to OTT video providers, hoping to expand its foothold in the OTT video space. The company launched five products in the AWS Elemental Media Services suite, each targeting a different piece of the OTT puzzle. Moreover, in March 2019, Apple Inc. announced Apple TV Plus video subscription featuring Apple’s original programming alongside a redesigned, more advanced Apple TV app.
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