OTT services are delivered over the internet, however, they don’t have any involvement in the planning or provisioning of service. As these services are directly offered to consumers ‘over the top’ of internet service provider’s network, they have derived the name – over the top services. In response to the proliferation of smartphones and their compatibility with OTT applications, the demand for OTT services is poised to rise exponentially in the coming years. Likewise, affordable rates of high speed mobile internet has bolstered the adoption of OTT market at large.
Th global over the top (OTT) services market has grown by leaps and bounds in recent years, mainly due to the availability of smart technologies amongst the masses. There has been little contention about the utility of OTT services amongst consumers of varying age groups. The consumption of knowledge has been made easier through the use of OTT services and offerings. Moreover, people have become more inclined towards high-end technologies and utility-driven means of consuming informative and entertainment content. The emergence of new OTT platforms has widened the scope of offerings available at the disposal of the masses. Henceforth, the global over the top (OTT) services market is foreseen to grow at a sturdy pace in the years to follow.
- Several new web series have gained popularity at the back of the popularity of OTT platforms. These platforms have helped producers of content in bypassing the limitations that come with theatre launches of films and series. Furthermore, OTT has been earmarked as the most popular mode of entertainment, especially amongst the younger population. The trend of binge-watching series and content is a nascent trend, and it can be attributed to the availability of key over the top (OTT) services. Henceforth, it is safe to say that the global over the top (OTT) services market is growing at a stellar pace.
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- OTT operators have come to include several classics and vintage series in order to captivate the attention of all the masses. There has been an increase in the subscription to OTT platforms that reek of comprehension and variety in recent years. This has given a strong thrust to the growth of the global over the top (OTT) services market.
Several key entities such as Netflix and Amazon Prime have made a niche for themselves in the global over the top (OTT) services market.
The OTT service providers have emerged as tough competitors for telecom service providers and cable operators. The mobile network operator messaging revenue has already declined to a great extent in the last five years and the impact has started to show up in their voice revenues as well. Also, the number of cord-cutters and cord trimmers has gone up due to on-demand media content available and reasonable rates as compared to traditional cable operators.
The global over the top services market was valued at US$1,049.21 billion in 2017 and the demand for OTT is estimated to expand at a CAGR of 16.4% from 2017 to 2025, reaching a value of US$3,538.04 billion by 2025.
Premium and Subscription Emerge as Leading Segment based on Business Model
On the basis of business model, the market is segmented into premium and subscriptions, adware, and ecommerce. The premium and subscription business model segment emerged dominant with a share of nearly 48.5% in the overall market in 2017. The segment earns revenue from fixed fee that the customer pays to download and access their application. The memberships or freemium turned premium service applications are also part of premium and subscriptions’ business model. Revenue generated by the premium and subscription segment is expected to increase owing to the increase in revenue of OTT media content and cloud service applications. The adware business model that earns revenue from advertisements on OTT applications is also expected to contribute for the OTT market. The ecommerce business model earns revenue from sales of its own products and services.
E-services that comprise of e-learning, e-health, e-business and e-commerce was the largest application segment in terms of revenue in the OTT services market in 2017, generating a revenue of 447.60 billion. The e-services segment is also anticipated to hold its foremost place throughout the forecast period. Media content and cloud services are also expected to produce higher revenues in the forthcoming period owing to quick content and service on demand made available through high speed internet at a reasonable price.
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Asia Pacific to Showcase Higher CAGR than Other Regional Segments
North America led the OTT services market in 2017 and is expected to remain dominant throughout the forecast period 2017 to 2025. The primary drivers for the growth of OTT services market in North America region are the highest mobile internet penetration levels as compared to other regions with internet speed from 13.1 Mbps to 14 Mbps in the U.S.A and Canada. Apart from North America, Europe and Asia Pacific are expected to experience significant growth in the OTT services market during the forecast period. TMR forecasts the Asia Pacific OTT services market to exhibit the highest CAGR of 16.1% between 2017 and 2025.
Based on end use, the global OTT services market can be bifurcated into personal and commercial segments. Among end-use verticals, the commercial segment emerged dominant in the OTT services market. Within the commercial segment, the ecommerce sector held the largest share of 32.1% in 2017. Apart from ecommerce, the media and entertainment, IT, education, and healthcare held considerable share within the commercial segment. This trend is expected to continue prevailing in the coming years owing to the increasing application of OTT in media and entertainment, and ecommerce.
Major OTT services market players profiled in the report are Amazon Inc., Twitter Inc., Netflix, Inc., Facebook, Inc., Dropbox, Inc., Google, Inc., LinkedIn Corporation, Skype (Microsoft Corporation), Apple, Inc., Evernote Corporation, Hulu, LLC., and Rakuten, Inc.
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