A study by MTM, a UK-based research and strategy consultancy firm expects the premium Over-the-Top(OTT) market for the UK, the Netherlands and Germany to grow at 80% over the next three years. The study was jointly commissioned by Vindicia, a leader in enterprise-class subscription billing, and Ooyala, the leading innovator in video streaming, personalization and analytics and was based on 30 OTT service providers in the pan-European region.
According to a joint statement on the study, the premium OTT market in UK is expected to grow from £110-130 million in 2013 to £390 million in 2017, while the Dutch market is expected to grow from €15-20 million in 2013 to €190 million in 2017. However, Germany spots a slower growth rate, increasing from €30-35 million in 2013 to only €117 million in 2017 on the back of lower broadband penetration in this country .
The study revealed that there will be significant opportunities for content providers to increase monetization of video content, in the form of transactional services, ad-supported offerings and hybrid bundles, in addition to the subscription business model. The respondents also highlighted the barriers to entry for premium OTT providers which include exclusivity of high-quality and high-appeal content, consumer consciousness and cultural factors.
Gene Hoffman, CEO and Chairman, Vindicia
The next three years will be a real turning point for the premium OTT market. Broadband penetration levels are rising, connected devices are becoming increasingly accessible and favourable regulations are being introduced, which is paving the way for OTT providers. The emergence of leading players, such as Netflix, is also fuelling competition and investment in premium OTT business models, while at the same time driving consumer awareness and adoption.
Jay Fulcher, President and CEO, Ooyala
OTT providers and new entrants face daunting challenges, however with the right approach and level of investment, the rewards will be substantial. Technology itself is becoming less and less of a barrier and as time goes on, we will start to see providers throw large amounts of money at OTT in a bid to differentiate themselves from the competition. Because of this, consumers will have higher expectations when it comes to user experience and quality of service, which will put significant pressure on providers to discover the most cutting edge technology. In effect, demand and innovation will go hand in hand.
