New data from Juniper Research has found that SVOD (Subscription Video on Demand) services, provided by the likes of Netflix and Amazon, will drive a surge in OTT revenues to reach $120 billion in 2022, up from $64 billion in 2017.
The research also found that over a quarter of global households will subscribe to SVOD services by 2022.
OTTs Spend Big on Content
The new research, Digital TV & Video: Network and OTT Strategies 2017-2022, found that expenditure by OTTs on original content was increasing: Juniper estimates that Netflix will spend over $6 billion during 2017-18, in contrast to the publicly funded BBC, which is investing a comparatively small sum of $1.4 billion.
SVOD players including Netflix are seeking to out-spend traditional providers; attempting to deliver original content and reduce reliance on expensive back-catalogues. Research author Lauren Foye explained: “Success will hinge on whether these providers can continue to produce hits such as ‘Stranger Things’. As consumers become more fluid in their uptake and loyalty to video services, OTTs could just as easily see users switch off.”
In addition, Juniper finds that OTTs will make a push for sporting rights, with Amazon likely to bid for rights to the Premier League in February 2018. The research argued that with such content owned by OTTs & traditional providers, consumers will be torn ever more; faced with multiple subscriptions.
Local Content: a Bastion for Broadcasters
The research identified that traditional broadcasters hold advantage over OTTs in provision of local content. Some regional OTT services have launched, such as iFlix, but these do not provide the same granular level of local coverage that broadcasters can offer.The delivery of media via IP (Internet Protocol) will have a benefit to broadcasters in driving consumers to their own OTT services, such as the BBC’s iPlayer - accessed via the ‘Red Button+’ on connected TVs. Juniper forecasts data usage to soar on these devices, approaching 800,000 Petabytes per annum by 2022.
